Archive for the ‘Individual Taxpayers’ Category

What Can You Do To Expedite Your Income Tax Refund?

Thursday, April 7th, 2022

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

The information that I am seeing on the Internet states that the IRS goal for having your tax refund in to your bank account is twenty-one days.  While this could be “business days”, I am thinking that it’s “calendar days”.  There are decisions that you can make and actions that you can take that will facilitate this process:

  1.  File your tax return electronically!  It has been said that “paper” is to the IRS as Kryptonite was to Superman!
  2.  Check, double-check, and triple-check your tax return for errors BEFORE you e-file!  From your correct name (that is in the Social Security Administration records) and social security number to the birth dates of your dependents to the numbers that you have entered throughout your tax return.  All numbers can be transposed.
  3. If your tax software includes this function run “Error Checking” multiple times.
  4. Be sure that the “Routing Number”, “Your Full Bank Account Number” and “Bank Name” are all correct.
  5. If you are applying for the “Child Tax Credit”, or the “Earned Income Credit”, or if you received payments for the “Economic Recovery Rebate”  be sure that you provide all of the correct information.  If you received advance child tax credit payments last year, or the Economic Recovery Credit you should receive two separate letters from the IRS stating the amounts that you received.
  6. If you have questions, use https://irs.gov or the Internet to obtain information from the Frequently Asked Questions (FAQs) or search for the instructions for your forms.

After you have filed your tax return you can use the IRS “Where’s My Refund” hyperlink to obtain the status of your refund ( Refunds | Internal Revenue Service (irs.gov) )

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If There Is Ever A Problem With Your Tax Returns, How Will the IRS Contact You?

Thursday, March 31st, 2022

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

There are several methods which the IRS may use to contact you to ask for additional information for your tax returns, to confirm an appointment, to discuss an upcoming audit, to collect your unpaid or delinquent taxes, to seize your property to satisfy your debts to the U S Treasury, to request copies of documents, or for other official reasons.  Under normal circumstances the communications will first be initiated by a letter from the Internal Revenue Service.

This is usually referred to as a “30-Day Letter”.  This means that the IRS expects to receive a response from you no later than thirty days from the date of the letter. Under no circumstances should you ignore the contents of this letter or this correspondence!

Notice in the reading below that the IRS now uses “third party” private debt collectors. While I do not have first-hand experience with these activities, anecdotal evidence from the Internet indicates that some of the tactics that are utilized may not always be either ethical, or achieve good business practice and standards.

Additionally, when reading the information from the IRS “Tax Tip” below, notice the situations and/or circumstances in which a particular method may be expected. At the end are five different methods that the IRS will NEVER use.  If you are contacted by any of the methods listed, ignore the contact!  It’s not from the IRS!!

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An Extension of The Time To File Your Tax Return Is NOT An Extension of The Time To Pay Your Income Taxes!

Monday, March 28th, 2022

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

This is the time of year in which it’s almost time to “pony up” those unpaid income taxes for last year.  There could also be valid reasons in which you are not ready to file your tax returns – missing tax return information (still do not have your last W-2s, 1099-R or Schedule K- 1 s, etc.), the large amounts of funds that you need are not yet available, or your tax preparer has not met with you to review your tax returns).  There are also other reasons.  However, while the Tax Code does permit you to request a six-month extension of the time to file your tax returns, it does NOT allow for you to request or delay the “time to pay” your total prior year taxes after the statutory deadline.

Well, what other options are available to you?

a.  Borrow the funds from your business, friends, or relatives

b.  Use your credit card

c.   Obtain a short-term loan from your bank or financial institution

d.  Submit a request to the Internal Revenue Service to participate in an “Installment Agreement” [Form 9465 – Form 9465 (Rev. September 2020) (irs.gov) ]-Submit this completed form with your tax return.

To avoid having to pay late payment fees and penalties, you can also review the IRS “Safe Harbor Rules”

#1 –Actual 2021 Federal tax liability is within $1,000.00 of your total 2021 tax  deposits for combined withheld taxes and estimated tax deposits, or;

#2 – You have already deposited a total of 110% of your 2020 tax liability  or;

#3 –You pay 90% of your 2021 Federal tax liability on or before April 18th.

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“Crowdfunding” – Are The Funds Taxable?? Do You Need To Keep Business Records??

Monday, March 21st, 2022

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

“Crowdfunding” is one of several Internet-based activities in which parties can receive funds from entities and individuals whom they have never met, or do not know.  There are websites that specialize in these activities.  Suppose you received a 1099-K  [“Payment Card and Third Party Network Transactions”] https://www.irs.gov/pub/irs-pdf/f1099k.pdf  What do you need to do?  What actions are you required to do?

Have you been keeping accurate business records from Day One?  Will your business records meet or exceed the IRS standards?  Recordkeeping | Internal Revenue Service (irs.gov)  Were the funds considered to be “gifts” or did you provide material, products, or services in exchange for the “gifts” or “donations”??

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