The Internal Revenue Service has provided taxpayers with a checklist of reminders to assist them with filing tax returns for the tax season 2023. These quick practices will simplify tax preparation from collecting documents to completing a tax return. But if your tax filing is complex and doesn’t have enough time, it is better to reach a tax professional. Tax professionals know how to file tax returns without any further chances for any IRS audit by filing with accuracy. Engaging a tax professional has various benefits like

• They don’t miss any deductions and tax credits available for you.
• They have up-to-date information on tax codes and new changes. Saves ample time.
• Help eliminate errors and avoid IRS Audit
• Provide the best tax-saving strategies for upcoming tax seasons.
• Investigate past tax returns and amend any missed deductions.

IRS Audit Group is a tax audit representation company in Los Angeles, California. With 15 years of experience, the certified tax professionals, lawyers, and experts of the company have successfully helped clients’ audit processes and understand their IRS taxing authority. IRS Audit Group has a process to follow while doing the tax filing as follows.

• Remember To Report All Types of Income on The Tax Return
• List out income from possible sources such as
• Online platforms that created and sold goods.
• Income from investments
• Part-time or seasonal employment, self-employment, or other business ventures
• Services offered by mobile apps.

Here Are A Few Tips from The IRS Audit Group for All Taxpayers

There are options to use Free Resources for Tax Filing.  The IRS’s Free File program, which is only accessible at www.irs.gov, enables individuals who made $73,000 or less in 2022 to electronically file their taxes for free. Also, there are Free File Fillable Forms, with limited features that anyone may fill out and submit on their own, likewise without cost, regardless of their financial level.

As part of a 21-year agreement with the IRS, top tax software firms make their online products freely accessible through IRS Free File. Seven products are available this year in English and one in Spanish. These products can only be accessed by taxpayers on the IRS website.

The IRS advises using IRS.gov to pay taxes, get refund status updates, and get tax issues answered without having to wait. There is no wait time and no need for an appointment because online tools and information are accessible every day of the year. Particularly useful resources from the IRS include Let Us Help You and the Interactive Tax Assistant.

Individuals can securely log in to their IRS Online Account to obtain personal tax account information, such as the balance, payments made, and tax records, such as adjusted gross income.

For the most recent information on tax changes, scam alerts, programs, goods, and services, download the IRS2Go mobile app, view IRS YouTube videos, or follow the IRS on Twitter, Facebook, LinkedIn, and Instagram.

IRS Audit Group is a tax audit representation company in Los Angeles, California. We can transfer your IRS case to Los Angeles irrespective of your state as IRS is a federal agency. Contact us for a free consultation to review your severity of tax debt. https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

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The due date for filing Tax Year 2022 Form W-2 and other wage statements (including Forms W-2AS, W-2CM, W-2GU, W-2VI, W-3SS, W-2c, and W-3c) with the SSA were January 31, 2023.  This deadline was applicable for filing under paper forms or electronically. Anyone with one or more employees to whom payments ($600 or more in wages even if there was no withheld income, social security, or Medicare tax) are made must file forms W-2 and W-3.  This includes non-cash payments also for the employee’s services in the trade or business during 2022. Anyone required to file Form W-2 must file Form W-3 to transmit Copy A of Form W-2. Even employers with only one household employee must file Form W-3 to transmit Copy A of Form W-2. If an error is discovered on an employee’s Form W-2 after sending it to the SSA, submit a Form W-2c, Corrected Wage, and Tax Statement. File Form W-3c, Transmittal of Corrected Wage, and Tax Statement whenever the employer files a Form W-2c with the SSA.

Extension Available for 30 Days

One can request a 30-day extension to file Form W-2 by submitting a complete application on Form 8809. However, the extension is not automatic, and it will be granted only in “extraordinary circumstances or catastrophe”.

Penalties for Failure to File

It’s important for employers to send W-2s to their employees and file them to SSA by the W-2 deadline (Jan 31, 2023) otherwise heavy penalties for late submissions or wrong information will be imposed. Penalties apply to the person or employer required to file Form W-2. The penalties apply to both paper filers and e-filers. The IRS can impose penalties for one or a combination of the below reasons.

• Failure to file correct information returns by the due date.
• Failure to furnish correct payee statements and /or Civil damages for fraudulent filing of Forms W-2.
• Failure to file and failure to furnish penalties.

Penalties for intentional disregard of filing and payee statement requirements are $580 and, have increased due to adjustments for inflation. The higher penalty amounts apply to returns required to be filed after December 31, 2022. The penalties for each information return or payee statement for the tax season 2023 are clearly stated by IRS in this link. Taxpayers will receive an IRS notice through mail about the penalties if imposed.  If one likes to dispute the penalty, one can still contact the IRS explaining the reason through a formal letter. But it is advisable to engage a tax professional who can understand your situation and guide you accordingly.

Generally, an employer needs to furnish Copies B, C, and 2 of Form W-2 to their employees by January 31, 2023. The employer will meet the “furnish” requirement if the form is properly addressed and mailed on or before the due date. If employment ends before December 31, 2022, an employer may furnish copies to the employee at any time after employment ends, but no later than January 31, 2023. Employers may furnish Forms W-2 to employees on IRS official forms or on acceptable substitute forms.

IRS Audit Group is a tax audit representation firm from Los Angeles, California. The Company has a team of certified tax lawyers experienced in state tax and federal tax. Regardless of client location, the tax experts can review your audit situation and we represent the IRS on behalf of the taxpayers for a better outcome in favor of the client. Please contact us for more information. https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

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Tax Season 2023 has already started, and the deadline is Apr 18, 2023, for the 2022 tax filing.  While preparing tax returns, taxpayers are expected to have completed all relevant and important paperwork in hand.  This aids in the accuracy of tax filing.  There are chances of errors and omissions in the tax filing which results in the delayed filing as well as delayed tax refunds.  A tax preparation checklist will keep you organized and help you feel less stressed when it’s time to file your taxes.  There are multiple benefits if you engage a Certified Tax Professional as well.

Benefits of Engaging a Certified Tax Professional

Numerous credits, exemptions, and deductions can significantly reduce your tax obligation.  It is good to hire a tax professional who goes through such minute details and prepares the tax return to reduce obligation in compliance with IRS rules.  Such tax professionals will thoroughly examine the tax details,  and at the same time, the tax professional will take all care to avoid the burden of an IRS audit at a later stage.  If you own a business or have a complicated personal tax return, engaging a tax professional is especially advantageous. Here are a few advantages of engaging tax professionals.

• Helps to develop a Tax Strategy
• Knows how to represent clients for tax audits.
• Knows how to make a report taking into account the audit.
• Reduce errors.

Tax Filing Modes

Whether you’re an individual or a business owner, you need to pay taxes under every head of income received.  IRS recommends filing taxes electronically to get accurate filing and faster refunds.  Two ways to transmit tax returns electronically are:

• By personal computer with online filing using tax prep software
• Through an e-file provider or tax professional who is an electronic return originator (ERO).
• Use IRS Free File or Fillable Forms for individuals with an adjusted gross income is $73,000 or less.
• Use a Free Tax Return Preparation website for Qualifying Taxpayers

Basic Documents Required to File Your Tax

• Personal Information includes your name, Social Security Card and number, Date of Birth, Home address, copy of last year’s federal and state tax returns, Bank Account number, and routing number to receive your refund by direct deposit.
• Dependent Information is needed when you claim someone is dependent on you. You need the dependent’s name, Social Security Number, and Date of Birth.
• Sources of Income include several different forms documenting the income you received in 2022. Some common ones include:
• W2s from your employer
• 1099-G for unemployment income and state and local tax refunds.
• 1099-R and SSA-1099 for retirement plan distributions and Social Security benefits.
• Records of any transition involving cryptocurrency
• Self-Employment and Business include the documents showing income earned as an independent contractor, record of all business income and expenses, documentation of home expenses, and records of business assets to be depreciated along with date and cost placed in service.
• Deductions lower your taxable income and increase your refund or decrease the amount of tax you owe. If you itemize deductions, you need information on medical expenses, premium paid for long-term insurance, real estate taxes, tax paid with your vehicle registration, documentation of casualty loss, and charitable donations.
• Tax Credits show expenses for higher education, Child Care costs, Adoption costs, and purchase of Health Insurance.
• Estimated Tax Payments are when you are self-employed and earn money that doesn’t have federal and state income tax withheld; you may have to make estimated tax payments. It includes estimated payments made during the year, prior year refunds applied to the current year, and any amounts paid with an extension.
• Proof of Losses is various financial losses faced that can be deductible. It may be stocks or other investments or records of any non-business bad debts that are not collectible.

IRS Audit Group is a Tax Audit Representation Firm located in Los Angeles, California.  Irrespective of the location, our tax audit experts help clients across the country by representing them during IRS audits.  With 15 years of experience in the industry, we do not outsource our services.  A dedicated tax professional will be engaged with you from the beginning till resolving the case.  Please contact us for further queries https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

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IRS announces an extension of the deadline for filing tax returns to victims of severe winter storms, flooding, and mudslides in California beginning January 8, 2023. Taxpayers from the FEMA announced designated areas now have until May 15, 2023, to file for returns or request extensions.

Who is Eligible?

• Individuals who reside and businesses whose principal place of operations falls under these designated areas are eligible for such an extended deadline.
• Also, workers and volunteers affiliated with government-recognized organizations who assist the relief activities are also eligible, if they are injured or killed as a result of a disaster.
• Apart from the taxpayers within the affected areas, individuals and businesses not located in the IRS-designated disaster area can call the disaster assistance hotline at 1-866-562-5227, and explain their situation to the assistor. After self-identifying, telephone assistors will manually code the accounts for relief.
• Even individuals and businesses who suffered uninsured and unreimbursed disaster-related losses can choose to claim on the tax filing for 2022 or tax returns for 2023 (next year). Again, they should be eligible based on the FEMA-declared designated areas.

These eligible taxpayers will have until May 15 to make 2022 contributions to their IRAs and health savings accounts. They will not get penalties for failure to pay estimated tax installments as long as such payments are paid on or before May 15, 2023. Further to the new deadline, taxpayers can also make their fourth quarter estimated tax payments on May 15 normally due on January 17, 2023, and April 18, 2023.

What is Relief?

This relief helps taxpayers to claim a deduction for the disaster loss, additional time to file the tax returns for 2022 and waive penalties for late filing. Taxpayers with an IRS address of record located in the designated area will automatically receive such relief. Despite this, if they receive notice of late filing or late payment penalty, IRS advises calling the number on the notice to abate the penalty.

How to Apply?

While filing their returns, eligible taxpayers should notify the name of the disaster by writing it in blue or black ink at the top of the form. California Taxpayers can mention “California, severe winter storms, flooding, and mudslides” on top of their forms. If filing electronically, taxpayers should submit disaster information according to the software instructions. They can also seek certified tax professionals who will assist in reviewing the tax situation and help to file to ensure accuracy. In a few cases, the IRS may contact the affected taxpayers for collection and examination of the matter. They are obligated to explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case. Therefore, engaging a tax professional is advisable to avoid an IRS audit notice later.

Additional information and instructions are provided in this FTB publication on the procedure to claim the tax deductions. Further California’s Franchise Tax Board (FTB) has detailed explanations of disaster types, application instructions, and claiming procedures in this link to help taxpayers and businesses. IRS also recommends that taxpayers visit the FAQ section for disaster victims before applying under the tax circumstances for accurate filing.

IRS Audit Group is a tax audit representation firm in Los Angeles, California. Usually, in a few cases, the IRS may ask for more information to validate the tax return filings. But rarely, IRS may like to audit your tax information through a letter of notice via Mail. In such cases, it is important to engage a tax professional like ours to represent your audit. Our licensed professionals comprise qualified CPAs and IRS Enrolled Agents. They can analyze your tax situation and help alleviate your burden. Please contact us for more information. https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

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The Work Opportunity Tax Credit (WOTC) is a federal tax credit that businesses can use to offset the cost of hiring people from specific target groups who have consistently encountered significant barriers to employment. WOTC initiatives help to improve workplace diversity and make it easier for all citizens to acquire decent jobs.

The Consolidated Appropriation Act, 2021 authorized the extension of the Work Opportunity Tax Credit until December 31, 2025. This means taxpayers can claim the credit on or before Dec 31, 2025, for such eligible hiring. Needless to say, WOTC is only for one time per employee and cannot be claimed for re-hired.

Eligible Businesses for WOTC

There is no specific limit on business size to be eligible under this scheme. Any size of business is eligible for the work opportunity tax credit if it hires candidates from qualified groups. This credit is available to both taxpayers and certain tax-exempt employers operating in the United States and some U.S. territories. Basically, the employers must fall under the below criteria as

• Taxpayers that can claim the credit against income taxes
• Tax-exempt employers can claim the credit only against payroll taxes and only for wages paid to members of the qualified veteran targeted group.

Target Groups Qualified under WOTC

Any employers can claim WOTC for the below-targeted groups under section 51 of the Code. The employee must be a certified member of any one of the following groups to proceed with the claim.

• Veterans
• Recipients state assistance under part A of title IV of the Social Security Act (SSA)
• Individuals who have previously served time in prison or who have been convicted of a felony
• People who live in empowerment zones or rural renewal counties
• Individuals who have been referred to an employer after completing a rehabilitation plan or program
• People whose families receive supplemental nutrition assistance under the Food and Nutrition Act of 2000
• Recipients of supplemental security income benefits under title XVI of the SSA
• Individuals experiencing long-term unemployment

How much can be claimed?

The amount of tax credit under the WOTC program varies based on the employee’s target group, total hours worked, and total qualified wages earned. For instance,

• If the qualified employee has worked for at least 400 hours and is still in the first year of employment, WOTC is equal to 40% of up to $6,000 wages paid or incurred with a maximum credit of $2,400 for an employee
• If the eligible employee has 120 to 399 hours of service, then a 25% rate applies to wages
• Up to $24,000 in wages may be considered in determining the WOTC for certain qualified veteran targeted group

 Procedure to Claim WOTC

Taxpayers and Tax-exempt organizations can apply through different IRS Forms to claim WOTC. But all need to complete Form 8850 which is a Pre-Screening Notice and Certification Request to certify that the employee is qualified under the target group. These documents must be submitted to the State Workforce Agency not the IRS within 28 days of the new employee’s start date. Once the State Workforce Agency certifies the employee, Taxpayers can file Form 5884 (Work Opportunity Credit) and tax-exempt employers file Form 5884-C (Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans) to claim the WOTC.

IRS Audit Group is a Tax Audit Representation Firm in Los Angeles, California. Our Tax professionals act on the behalf of the taxpayer during an IRS audit. The IRS audit process can terrify some taxpayers but the Taxpayer Bill of Rights states that individuals can seek help from an IRS tax representative like us to represent them during the IRS audit. Don’t Panic, if you have received a mail for IRS Audit but act fast by contacting us immediately for the next step.

https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

Email address: [email protected]

Qualified Opportunity Fund (QOF) is an investment vehicle formed as a company or partnership with the goal of investing in property within Qualified Opportunity Zones. This program was formed per the 2017 Tax Cuts and Jobs Act to provide a tax incentive for private, long-term investment in economically distressed communities. There are thousands of low-income communities in all 50 states, the District of Columbia and five U.S. territories that are designated as Qualified Opportunity Zones. Taxpayers can invest in these zones through Qualified Opportunity Funds. This type of opportunity funds assists taxpayers in giving tax advantages and rewards to investors.

Certain types of businesses cannot be included in opportunity funds, even if it falls within opportunity zones. Following are types of business which are not included in opportunity funds.

• Golf courses
• Country clubs
• Massage parlors
• Hot tub facilities
• Suntan facilities
• Racetracks or other facilities used for gambling
• Liquor stores

Eligibility Criteria

To certify and maintain a Qualified Opportunity Fund, an entity must:

• Be a partnership, corporation, or LLC that is treated as a partnership or corporation, and it must have filed a federal income tax return;
• Be organized for the purpose of investing in Qualified Opportunity Zone property under the laws in one of the 50 states, the District of Columbia, a U.S. possession, or a federally recognized Indian tribal government: and
• Hold 90% of its assets in Qualified Opportunity Zone property.

IRS Form Required to Certify as a Qualified Opportunity Fund

The entity must file Form 8996, QOF, with the qualifying partnership or corporation’s federal tax return each year to attest and retain its status as a Qualified Opportunity Fund. The entity must file Form 8996 by the due date for 2022 tax return (including extensions).

Form 8996 is used to:

• Certify the corporation or partnership is organized to invest in Qualified Opportunity Zone property.
• Report that it meets the 90% investment standard of section 1400Z-2.
• Figure the penalty if it fails to meet the 90% investment standard.

Benefits to the Taxpayers

The QOF basically provides tax deferral to the capital gains if the taxpayer elects to do so. The basis in the QOF investment becomes zero when one elect to defer the gain. The longer the investment in the QOF, the higher the basis grows. The tax benefit received is determined by the length of time one retains the Qualified Opportunity Fund investment. For instance

• After five years, a taxpayer who defers gains through a Qualified Opportunity Fund investment obtains a 10% step-up in tax basis
• It will be followed by another 5% step-up after seven years. Note that the taxpayer must have invested before December 31, 2019, to receive the entire 15% step-up in tax base. The taxpayer will have held the investment in the fund for seven years when the tax is triggered at the end of 2026, thereby qualifying for the 15% increase in tax basis.
• If the taxpayer holds the investment in the QOF for at least 10 years, then such taxpayer may be able to permanently exclude gain resulting from a qualifying investment when it is sold or exchanged.

A team of tax attorneys from IRS Audit Groups helps taxpayers in filling their IRS return for 2022. We are certified tax lawyers who represent taxpayers during any IRS audit. We can resolve common tax problems to complex audit sessions to help comply our clients. Get free consultation by calling or filling the enquiry from our website below

https://irsauditgroup.com/contact/

Telephone Number: (310) 498-7508

Email address: [email protected]

What is FBAR?

According to the Bank Secrecy Act, one must declare and keep records of certain foreign financial accounts, such as bank accounts, brokerage accounts, and mutual funds, to the Treasury Department every year. The accounts are reported on a Financial Crimes Enforcement Network (FinCEN) Form 114 called a Report of Foreign Bank and Financial Accounts (FBAR). The annual due date for filing FBARs for foreign financial accounts is April 15^th of every year.

Who must file FBAR?

A citizen, resident, corporation, partnership, limited liability company, trust, or estate in the United States must file an FBAR to report if they have a financial interest in or signature or other authority over at least one financial account located outside the United States and its aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported.

However, you are exempt from reporting foreign financial accounts if they are:

• Correspondent/Nostro accounts
• Owned by a governmental entity
• Owned by an international financial institution
• Maintained a U.S. military banking facility,
• Held in an individual retirement account (IRA) of which you’re an owner or beneficiary,
• Held in a retirement plan of which you’re a participant or beneficiary, or
• Part of a trust of which you’re a beneficiary,  if a U.S. person (trust, trustee of the trust or agent of the trust) files an FBAR reporting these accounts.

Further taxpayers don’t have to file an FBAR for the tax year 2022 if you meet the following criteria:

• All your foreign financial accounts are reported on a consolidated FBAR, or
• You jointly own all your foreign financial accounts with your spouse and:
  • You completed and signed FinCEN Form 114a authorizing your spouse to file on your behalf, and your spouse reports the jointly owned accounts on a timely-filed signed FBAR.

Note: Your eligibility for this exception is unaffected by your filing status, such as married-filing-jointly or married-filing-separately.

How to file the FBAR?

The FBAR must be filed online using FinCEN’s (Financial Crimes Enforcement Network) BSA E-Filing System. The FBAR is not filed with the federal tax return. You need to call FinCEN’s Resource Centre to request an exemption from e-filing if you want to file your FBAR on paper. If FinCEN authorises your request, you will get a printed FBAR form to fill out and mail to the IRS.

If you wish someone else to file your FBAR on your behalf, fill out FinCEN Report 114a, Record of Authorization to Electronically File FBARs, and provide it to them. FinCEN Report 114a is not submitted with the FBAR; instead, retain it for your records and make it available to FinCEN or the IRS upon request.

Deadline to file for the Tax year 2021

The FBAR is an annual report that is due on April 15 of the year reported. If taxpayers miss the FBAR annual due date of April 15, they will get an automatic extension until October 15. To file the FBAR, you do not need to request an extension.

More information related FBAR filing and other resources available on the IRS website here – https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

IRS Audit Group are a team of Tax Professionals, CPAs, Enrolled Agents and Tax Attorneys, primarily specializing in Internal Revenue Services (IRS) Tax Audit Representation. We resolve your tax audit issues and represent on behalf of you to the IRS. Call us to get free consultation from our tax professional to understand our Tax audit concerns.

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IRA or the Individual Retirement Account will help lower your taxable income for the tax season 2022. IRA is easy to set up, and it allows to save for retirements with tax-free benefits. One can open a traditional IRA from a bank, brokerage, mutual fund, or insurance company. The money saved in this account can be used to invest in stocks, bonds, mutual funds, exchange-traded funds, and other approved investments.

As we know, IRA is an individual-owned account that provides more flexible benefits than the 401(K) plans.  The 401(K) plans are sponsored by employers.    The employer has the right to change the plan or limit the investment options.

Traditional IRA vs. Roth IRA

These are two common IRAs that an individual can set up to contribute to their retirement savings. The important difference between these two is traditional is tax-deferred and Roth is tax-free.

Traditional IRA: The contribution is deductible from your tax return. The earnings grow tax-deferred until you withdraw them upon retirement. But the withdrawals are taxable as income after age 59½. There is also a 10% IRS penalty tax in addition to current income tax if the withdrawal is made before 59½. Individuals with a low tax bracket at the time of retirement or taking withdrawals can use a traditional IRA.

Roth IRA: Savings for Roth IRA is contributed after the tax is paid. But the withdrawal is penalty-free and tax-free after the age of 59½. Still, one needs to wait at least five years to withdraw the savings from Roth IRA.

What has been changed for the tax year 2022?

The contribution limit for tax season 2022 is not changed from the previous year for the IRA, but the adjusted gross income (AGI) has been increased like every year. One can contribute a maximum of $6,000 in the tax year 2022 if you are below the age of 50. An additional contribution of $10,00 is allowed for individuals older than 50. But the contributions for the 401(k)s and 403(b)s plans that are provided by employers for the tax season 2022 have been increased. For the retirement savers younger than 50, the maximum contribution limit has been set as $20,500 in 2022, an increase of $1,000 from 2021. Those 50 and older can add an extra $6,500 (same as 2021) — for a maximum contribution of $27,000 in 2022.

The AGI limits for the tax year 2022 on Traditional IRA tax deduction are summarized below

The AGI limits for the tax year 2022 on Roth IRA tax contribution are summarized below

The savings on an IRA can help build sizable retirement savings. It gives more investment options and choices while having benefits like tax-deductible and tax deferral. Take advantage of this terrific opportunity and jump-start your IRA account. Taxpayers can contribute to an IRA for the 2021 Tax Year until the tax deadline (April 18, 2022).

Call our consultants with IRS Audit Group, Telephone Number: (310) 498-7508 for more information and to find out if you are eligible to contribute. Let us help you establish your retirement funding plan today.

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As the Tax season for 2021 is nearing, it is good to have a basic understanding of the recent adjustments in tax structure, exemptions, and credits.  Such info will help taxpayers to plan and file tax returns in time.  Every year, the Internal Revenue Service (IRS) updates tax rates, rebates and thresholds that are adjusted with the annual inflation. On Nov. 10, 2021, the IRS announced inflation adjustments for 2022 affecting standard deductions, tax brackets, and more.

Thus, the Tax Filing Year 2022 got many updates that are listed in detail by IRS in this document. It is important to discuss a few such changes that need spotlight among every taxpayers which are listed below.

1. Child Credit on Monthly Basis

Child Tax Credit provides financial benefits to those with qualifying kids. For those Tax Years before 2021, the IRS allowed claim up to $2,000 per child under the age of 17 in Tax Filing.  However, during the Tax Year 2021, the following changes were done.

• Child tax credit amount has increased up to $3,600 per child under 6
• Child tax credit amount has increased up to $3,000 per child ages 6 to 17
• Child tax credit is now fully refundable.
• Child tax credit has been converted to monthly payment

As the COVID-19 has negatively impacted the country’s economy and the taxpayers, the IRS provided 50% of the child tax credit as advance monthly payments during the period July to December 2021. Tax filers may need to repay if they received more than the eligible pay.  Similarly, those who received lesser credit can file and claim back. Thus, the expanded child tax credit payments could impact many families’ tax refunds. For more specific details, please be guided by the IRS government portal

https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

2. Recovery Rebate Tax Credit

Recovery Rebate Tax Credit or Stimulus Payment is another benefit in case you haven’t received the third economic impact payment while preparing Tax Filing. Those who lost jobs or whose income drastically decreased in 2021 can now claim the Recovery Rebate Tax Credit. Here are the eligibility criteria to receive the economic impact payment.

• You’re not dependent of a taxpayer
• Your adjusted gross income (AGI) can’t exceed:
• $150,000 for married filing jointly
• $112,500 for heads of household
• $75,000 for single filers

One must file 2021 Tax Return to receive the Recovery Rebate Tax Credit even if not done Tax Filing or any tax return in the past. You can use any one of IRS’ Free File Providers from the list given.

Note: You must have AGI of less than $73,000 to use the IRS’ free file program.

Learn more from IRS official website below

https://www.irs.gov/coronavirus/economic-impact-payment-information-center

3. Claim Charitable Donations

For the Tax Year 2021 Tax filing, the claims on Charitable Donations are changed with the increase in tax deductions. Taxpayers both individuals who itemized and those who do not itemize can avail such benefits of these deductions while filing the return.  Now, the tax filers can deduct up to $300 for cash donations to qualifying charities (up to $600 combined for married filers) whether you itemize or take the standard deduction for 2021.

Those who claim charitable contributions as itemized deductions can claim cash contributions made to qualifying organizations up to 100% of their adjusted gross income (AGI) for the 2021 tax year only. Such deductions used to be limited to 60% of the taxpayer’s AGI. More specific info can be found at https://www.irs.gov/about-irs/the-irs-encourages-taxpayers-to-consider-charitable-contributions

IRS Audit Group continues to monitor the tax provision updates every year and highlights important changes that benefit the taxpayers in Tax Filing. We are certified tax lawyers having immense experience in state and federal tax laws. Get a free consultation with us to understand your tax problems and help you deal with IRS on this upcoming Tax season 2022. Telephone Number: (310) 498-7508 (or) [email protected]

There are a few tax changes that you might want to make yourself aware of in 2018. Many of these new changes are updates from the IRS and a major tax reform that was passed by Congress. These changes have the potential to alter your situation drastically in the 2018 tax year and future years to come.

The IRS usually unveils its new changes to taxes every year. This includes any cost-of-living adjustments for retirement savings, as well as inflation changes on specific tax provisions. All of these changes, along with the bill that was recently passed by Congress, have the potential to result in major changes to the amount you owe on your taxes. Let’s take a look at some of the most prevalent ways these new changes can affect you.

Top income tax rate

If you’re an individual with an annual income of over $500,000, you’re in the new top income tax rate. The new 37 percent top rate will also apply to any married taxpayers that file jointly at $600,000 and higher.

Increased child tax credit

The existing child tax credit has been increased to $2,000 per each qualifying child, as long as they are under the age of 17 years. This figure is up from the previous amount of $1,000. For those that do not qualify for the new $2,000 credit, a $500 credit will be available.

Changes to standard deductions

As far as standard deductions go, anyone that is married and planning on filing jointly will notice an increased standard of deduction of $24,000. This is a decent leap up from the previous amount of $13,000.

There is now a $12,000 standard deduction for all single taxpayers and those that are married, but wish to file separately. This amount has increased almost double its original amount of $6,500. If you identify as the head of your household, you will see the amount increase from $9,550 to $18,000.

Limit increase for retirement savings

If you’re an employee that participates in a retirement plan, you may be able to now contribute up to $18,500 this year for your retirement plan. This amount is a $500 increase from the $18,000 limit of 2017. Some of the participating plans include: 401k, 403b and most of the 457 plans, along with the Thrift Savings Plan.

If you contribute to an individual retirement account or IRA, you’ll notice higher income ranges following the cost-of-living adjustments. For single taxpayers, the new limit becomes $63,000 to $73,000.

Deductions that have been done away with

A large majority of the deductions remain unchanged under the new tax law. However, there are a few to mention that are being removed. The following deductions are no longer available under the new 2018 tax laws.

• Moving expenses
• Unreimbursed employee expenses
• Tax preparation expenses
• Employer-subsidized parking and transportation reimbursement
• Casualty and theft losses (except those that are attributable to a federally declared disaster)
• Other miscellaneous deductions that were previously subject to the 2% AGI cap

It’s important to be aware of each of the changes made for the 2018 tax season, as well as any new tax laws for the future. Being up-to-date on all the latest laws and regulations will help to avoid any headaches when it comes to making sure your taxes are done properly. Each year the IRS makes changes to how our taxes are done, like adding or removing deductions and making changes to tax rates.

Changing income rages, as well as changes on corporate levels can make the ever-evolving tax laws seem like a chore to keep up with. The good thing is that for some people, these changes can be beneficial to them and their entire family. Prepare yourself for the current tax season and all upcoming seasons, so that you can avoid any costly mistakes on your taxes.