We are discontinuing the referral program at this time. Thank you all for your referrals but we are at capacity at this point. We look forward to working with each of you and still welcome your referrals but the “Refer 3 get yours free” program is now over. Thank you.

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https://lifehacker.com/how-to-talk-to-a-real-human-at-the-irs-without-waiting-1842128259

 

IRS Tax Tips February 18, 2021
	Issue Number: COVID Tax Tip 2021-21 Taxpayers must report gig economy income on their tax return In 2020, many people joined the gig economy to help make ends meet during the pandemic. Whether it’s a side business or a primary source of income, all taxpayers need to understand how their gig work affects their taxes. The bottom line is taxpayers must report gig economy income on their tax return. Here’s a quick overview of the gig economy: The gig economy is also referred to as the on-demand, sharing or access economy. People involved in the gig economy earn income as a freelancer, independent worker or employee. They use technology known as online platforms to connect them with customers to provide goods or services. This includes things like renting out a home or spare bedroom and providing delivery services. Here are some things taxpayers should know about the gig economy and taxes: • Money earned through this work is usually taxable. • There are tax implications for both the company providing the platform and the individual performing the services. • This income is usually taxable even if the: – Taxpayer providing the service doesn’t receive an information return, like a Form 1099-NEC, Form 1099-MISC, Form 1099-K, or Form W-2. – Activity is only part-time or side work. – Taxpayer is paid in cash. • People working in the gig economy are generally required to pay: – Income taxes. – Federal Insurance Contribution Act or Self-Employment Contribution Act tax. – Additional Medicare taxes. • Independent contractors may be able to deduct business expenses. These taxpayers should double check the rules around deducting expenses related to use of things like their car or house. They should remember to keep records of their business expenses. • Special rules usually apply to rental property also used as a residence during the tax year. Taxpayers should remember that rental income is generally fully taxable. • Workers who do not have taxes withheld from their pay have two ways to pay their taxes in advance. Here are these two options: – Gig economy workers who have another job where their employer withholds taxes from their paycheck can fill out and submit a new Form W-4. The employee does this to request that the other employer withholds additional taxes from their paycheck. This additional withholding can help cover the taxes owed from their gig economy work. – The gig economy worker can make quarterly estimated tax payments. They do this to pay their taxes and any self-employment taxes owed throughout the year. For more information on the gig economy, taxpayers can visit the Gig Economy Tax Center.

 

My son, Dalles Hesseling, has successfully completed all classes and certifications to prepare tax returns this season. If you are unable to get an appointment with me, feel free to book with him as he works directly with me and I still inspect and approve all returns prior to filing. Thanks.

Monday, January 28

The IRS has announced that they will begin accepting and processing all individual returns on Monday, January 28. Returns transmitted before this date are being held in a queue and will be transmitted to the IRS in the order they were received.

When the IRS starts processing returns, acknowledgments may be unpredictable due to the high volume of returns being processed.

Looking forward to a big fat refund check this year?

Maybe you’ll use it to pay down debt or treat yourself to a big purchase like a TV. Or maybe that check will help you put some savings in the bank or fund that summer vacation you’ve been dreaming about in this cold weather.

Well, money expert Clark Howard would like to have a word with you about why you’d be better served with a reality check instead of a refund check…but more about that later!

First, let’s tell you when you’re likely to get your money!

You can look forward to your refund on this date….

Twenty-one is a magic number for the Internal Revenue Service (IRS).

That’s the average number of days the IRS says it normally takes for the turnaround of a tax return when a refund is due to the taxpayer.

But the way you file and how you request a refund can have a lot of impact on how long it takes for your money to show up.

Case in point: If you e-file and select direct deposit, you’re likely to get your refund a lot more quickly than if you mail in a paper return and wait for a paper check to be mailed back to you.

With that in mind, we here at Team Clark have put together a rough schedule of when you can expect your refund.

We’ve taken into account the date you file; the method of filing; and the way you request your refund.

Just remember, this chart is is no way binding nor is it guaranteed in any way. It’s just a rough estimate of what to expect!

One important caveat to mention:

If you claimed the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) and are waiting for a refund, don’t expect to get it before February 27.

That’s because the IRS is required to hold your refund until mid-February if you claimed either of these two credits. So the IRS acknowledges that February 27 is the earliest EITC or ACTC-related refunds will be available to those taxpayers — if everything else goes smoothly with your return and you opted for direct deposit.

So without further ado…

If the IRS receives your return by…	Anticipated refund date if e-filed with direct deposit	Anticipated refund date if e-filed with refund mailed	Anticipated refund date if paper return filed with direct deposit	Anticipated refund date if paper return filed with refund mailed
January 29	February 12	February 20	February 26	March 5
February 5	February 20	February 26	March 5	March 12
February 12	February 26	March 5	March 12	March 19
February 26	March 12	March 19	March 26	April 2
March 5	March 19	March 26	April 2	April 9
March 12	March 26	April 2	April 9	April 17
March 19	April 2	April 9	April 17	April 23
March 26	April 9	April 17	April 23	April 30
April 2	April 17	April 23	April 30	May 7
April 9	April 23	April 30	May 7	May 14
April 17	April 30	May 7	May 14	May 21

Now, a word about tax refunds in general…

According to the IRS, the best way to determine the status of your refund is to use the “Where’s My Refund?” tool or to download the IRS2Go mobile app.

But if you’re really into the idea of getting a big refund check, you need to check yourself first!

“People will often come up to me around tax time and happily ask for advice on what to do with their giant refund,” money expert Clark Howard says. “They treat it like it’s found money or some kind of windfall. But it’s not.”

Getting a big refund means you’ve overpaid your taxes all year and didn’t have access to that money all year long. So it’s been sitting in government coffers and probably earning interest for them instead of going to work in your own life.

The solution?

Work with your payroll department to adjust your withholding so you approach being tax-neutral next year — meaning that you get as close as possible to not owing additional money at tax time and not getting a refund either.

Here’s how this plays out in the real world: Let’s say you typically get a refund of $1,200 every year. Try reducing your withholding at work by $100 a month and have your bank or credit union automatically transfer that $100 each month into a savings account.

You’ll never see it, so you’ll never miss it. But the end result is that you’ll build your savings and earn interest all year long.

Just one word of advice…You might want to wait until after February 15 to talk with your HR or payroll people. That’s because there are brand-new withholding tables for companies to follow when calculating your paycheck going forward.

Businesses have until the middle of February to adjust the way they do their withholding to comply with the new tax law.

If you talk to them too soon, you’re likely to get blank stares because they’ll be overworked and frazzled while trying to get on board with the new withholding rules. Wait until they have everything running smoothly, then have that talk with them!

Happy New Year.  I have been getting flooded with calls, texts, and e-mails regarding the question of prepaying property taxes.  Below is the best article i could find to help answer the question.  Please direct anyone to this blog with questions.  Thanks.

Thousands of homeowners are rushing this week to prepay their property taxes before the new tax legislation takes effect in 2018. The GOP bill caps the amount of state and local taxes that can be deducted from federal income tax liability at $10,000.

But many residents trying to avoid that deduction limit on their state and local taxes will be disappointed: the IRS on Wednesday announced that taxpayers can prepay their 2018 property taxes only if they have already received a tax assessment from their local government and they make payment by the end of the year.

The new tax plan passed by the GOP brings sweeping changes to state and local tax deductions, including the property tax. Under the old system, a homeowner could deduct all these taxes from their federal income tax liability. This move effectively transferred funds from the federal government to the states and saved homeowners $35 billion in 2016, according to the Tax Policy Center. In 2018, the deduction is capped at $10,000.

But what if you prepay your 2018 tax bill in 2017, when the deduction still exists? According to the new IRS guidance, “pre-paying 2018 state and local property taxes in 2017 may be tax deductible under certain circumstances.”

Can I prepay local income taxes?

For state and local income taxes, the bill prevents it.

“…an amount paid in a taxable year beginning before January 1, 2018, with respect to a State or local income tax imposed for a taxable year beginning after December 31, 2017, shall be treated as paid on the last day of the taxable year for which such tax is so imposed.”

What about property taxes?

While the bill makes prepayments for income tax count only in the year the tax is imposed, it doesn’t say anything about property taxes, so prepaying is being considered fair game. But the IRS followed up on the recently passed law with guidance of its own: “A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.”

Judging by how the law was written — with it explicitly saying “income tax” and not property tax — prepayment is being considered legit by many localities. So if you prepay your real estate taxes for 2018 in 2017, the payment can be used as an itemized deduction on your 2017 tax return under the old system, potentially saving homeowners — especially those in high-tax states — quite a bit of money.

However, the IRS may still issue more rulemaking to fill in the details, which could be important. One example that could affect people, is that the IRS may only allow this prepayment for people who already have a property tax bill. (Wednesday’s guidance makes this clear that taxes assessed in 2018 can’t be deducted in 2017.)

 Should I prepay?

The accountants Yahoo Finance spoke with noted that it depends on your financial and tax situation, and it’s good to run the numbers. Vincent Cervone, an accountant in Brooklyn, N.Y., said if you make enough money to qualify for the Alternative Minimum Tax (AMT), prepaying property taxes won’t save you money. This is because if you’re subject to the AMT, you are not allowed to deduct state and local taxes, so prepaying may not reduce your federal income tax bill. The bottom line is: Talk to your accountant.

“I’m telling my clients, look at your tax return for last year, and if you paid AMT last year, it means you’ll pay this year and prepaying property tax won’t help,” he told Yahoo Finance. “If you didn’t pay AMT and have property taxes of $10,000 [or more], I recommend you prepay. You’ll get a discount.”

How do I know if my county or town allows prepayment?

Unfortunately, not all towns or cities are allowing homeowners to make these payments. But more importantly, if your 2018 property taxes haven’t been assessed yet, you can’t deduct them on your 2017 tax returns.

Many towns across the country have issued statements as to whether they’re accepting early payments for property taxes, and New York Gov. Andrew Cuomo went so far as to sign an executive order authorizing localities to accept early payments, Barry Kleiman, a CPA with Untracht Early, said. (Cervone, however, noted that you could already do this if the municipality allowed it.)

Some towns and cities have placed robocalls to residents this week offering guidance on prepayment. Others have issued releases on town websites instructing homeowners on whether they can prepay property taxes, how to pay, and how much.

But many municipalities have not issued 2018 assessments yet, and it’s unlikely they will with so few days left in the year. So the new IRS ruling may sow even more confusion for taxpayers who paid their 2018 property taxes but didn’t get an assessment from local officials.

When is the deadline to prepay?

All payments must be made in tax year 2017, but the precise deadlines vary by town. Some tax collector’s offices, like in Montclair, N.J., may have extended hours and could be open as late as Saturday, Dec. 30, allowing residents extra time to prepay if they want to. The last weekday in 2017, however, is Dec. 29.

Can I mail a check?

This varies as well. Some towns like Millburn, N.J., require residents to drop off payments in person or in a drop box during regular business hours, and will reject and mail back after-hours payments. Check with your local office.

Hey Everybody.

We have a new Business Expense worksheet on the “Pages” page.  It has 3 tabs at the bottom so you can choose the tabs that apply to your deductions. That way we can get more accurate deduction numbers.  Go ahead and download it for free and use it all year to track your business related expenses.  We even have a home rental tab.  Enjoy.

Business Expense Worksheet Tabs