In this tax season 2024, the IRS sets deadlines for taxpayers to pay their taxes, including estimated tax payments not subject to withholding. The first quarter estimated tax payment deadline for 2024 is April 15. This blog delves into the details of this deadline, its significance, who it affects, why it exists, penalties for non-compliance, exemptions, tools for estimation, required forms, and IRS support.

When is the Deadline?

April 15 is the deadline for tax season 2024 to submit first quarter estimated tax payments to the IRS. This deadline is crucial for individuals and businesses with income sources that do not have taxes withheld, such as self-employment income, interest, dividends, and rental income.

Who Needs to File?

This deadline primarily affects self-employed individuals, freelancers, independent contractors, sole proprietors, partners in partnerships, and shareholders in S corporations. It also includes individuals who receive income from sources where taxes are not automatically withheld.

Reason for Quarterly Payments

Taxpayers are required to make estimated tax payments quarterly because of the pay-as-you-go system in the U.S. tax system. This system ensures that taxes on income earned during the year are paid throughout the year, rather than waiting until the following year. This helps in avoiding large tax bills at the end of the year and ensures a steady flow of revenue for the government.

Types of Income

When estimating quarterly tax payments, taxpayers need to ensure they include all forms of earned income, encompassing regular employment income, part-time work or side jobs, earnings from selling goods or services (typically reported on Form 1099-K), and various other sources like interest, dividends, capital gains, alimony, and rental income. It’s crucial to incorporate all income, including those not subject to withholding, to accurately calculate and fulfill tax obligations, thereby avoiding penalties or underpayment issues.

Penalties for Late Filing

Failure to file estimated tax payments by April 15 can result in penalties. The penalty amount varies depending on factors like the amount of tax owed and the duration of the delay. Taxpayers can use IRS penalty calculators or consult IRS publications to understand the potential penalties they might face.

Estimation and Required Documentation

To report and pay estimated taxes, individuals and businesses to file Form 1040-ES. This form includes worksheets for calculating the estimated tax amount and payment vouchers for submitting payments to the IRS. Additionally, there are online calculators and tax preparation software that can assist in accurately estimating tax liabilities based on income and deductions. It is also advisable to engage certified tax professionals to avoid any tax disputes, penalties, or IRS audits in the future.

Exemptions and Due Date Extensions

Certain groups of taxpayers, including farmers and fishers, recent retirees, individuals with disabilities, those receiving irregular income and victims of disasters are eligible for exceptions to penalties and special regulations.

Following recent disasters, eligible taxpayers in Tennessee, Connecticut, West Virginia, Michigan, California, and Washington have an extended deadline for tax season 2024 for estimated tax payments until June 17, 2024. Similarly, eligible taxpayers in Alaska, Maine and Rhode Island have until July 15, 2024, and eligible taxpayers in Hawaii have until Aug. 7, 2024. For more information, visit Tax Relief in disaster situations.

In addition, taxpayers who live or have a business in Israel, Gaza, or the West Bank, and certain other taxpayers affected by the terrorist attacks in the State of Israel, have until Oct. 7, 2024, to make estimated tax payments.

IRS Support and Assistance

The IRS provides various resources and support for taxpayers regarding estimated tax payments. This includes to include the Interactive Tax Assistant, tax topics and frequently asked questions, and assistance through phone or in-person support at IRS offices or tax assistance centers.

IRS AUDIT GROUP

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

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A solid grasp of tax laws and regulations is essential for businesses to effectively handle their financial matters. Nevertheless, even with meticulous attention, errors can occur, which may result in complications when it comes to complying with tax laws and regulations.  In a few circumstances, these errors might prompt a tax audit by the Internal Revenue Service (IRS). Failing an IRS audit can result in severe outcomes, such as monetary fines and harm to the organization’s image.  In this article, we’ll explore what could happen if a business fails an IRS audit, highlighting the importance of taking proactive steps to comply with tax rules and seeking help from knowledgeable tax professionals to protect businesses from these challenges.

Financial Consequences

1. Penalties and Fines: Failing an IRS audit can result in hefty penalties and fines. These penalties can be imposed for underreporting income, overstating deductions, or other inaccuracies in tax filings. The financial impact of these penalties can be substantial and may strain the resources of the business.
2. Additional Taxes: Besides penalties, businesses need to pay additional taxes if an audit reveals unreported income or disallowed deductions. These additional tax liabilities and accrued interest can further exacerbate the financial burden on the business.
3. Legal Costs: In cases of serious non-compliance or suspected tax evasion, businesses incur legal costs defending themselves against IRS scrutiny. Legal representation can be expensive, adding to the overall financial strain caused by the audit process.

Reputational Consequences

1. Loss of Trust: Failing an IRS audit can damage a business’s reputation and erode trust among stakeholders, including customers, suppliers, and investors. Public knowledge of non-compliance issues can tarnish the business’s image and undermine its credibility in the marketplace.
2. Negative Publicity: News of an IRS audit or allegations of tax evasion can attract negative publicity, further harming the business’s reputation. Negative media coverage can have lasting effects on consumer perception and may drive away customers and business partners.
3. Regulatory Scrutiny: Failing an IRS audit triggers increased scrutiny from other regulatory bodies, including state tax authorities and industry regulators. This additional scrutiny can disrupt business operations and add further strain to the business’s reputation and resources.

Importance of Proactive Compliance Measures and Professional Representation

1. Maintaining Accurate Records: Businesses need to maintain accurate financial records and documentation to support their tax filings. Proactive record-keeping can help businesses identify and address potential compliance issues before they escalate into audit triggers.
2. Seeking Professional Guidance: Engaging qualified tax professionals from a reputed tax audit representation firm can provide businesses with expert guidance on navigating complex tax laws and regulations. Professional representation during an IRS audit can help businesses present their case effectively and minimize the risk of adverse outcomes.
3. Co-operating with Authorities: Businesses should cooperate fully with IRS auditors and provide requested information promptly. Transparency and cooperation demonstrate a commitment to compliance and may help mitigate penalties and fines.

If you have received notification from the IRS which is usually via. mail for IRS Audit, don’t panic but don’t delay. It is important to read the mail completely and understand the reason stated for the audit, the next step to be taken, or the documents requested by the IRS. To navigate these challenges, it is recommended to engage a tax audit representation firm like the IRS Audit Group.

IRS AUDIT GROUP

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

The Internal Revenue Service (IRS) has instructed taxpayers to avoid errors on their federal tax returns and expedite their refunds for the Tax Season. These guidelines aim to assist in submitting returns that are thorough, precise, and free of mistakes.  To help you navigate through Tax Season 2024 smoothly, here are some tips to avoid tax return mistakes and optimize your refund.

GATHER ALL TAX DOCUMENTS

Start gathering all necessary documents well before the 2024 tax filing deadline. This includes W-2 forms, 1099s, receipts for deductions, investment statements, and any other relevant financial documents. Having everything organized will make the tax preparation process much smoother and reduce the chances of overlooking important information.

USE ELECTRONIC FILING

The IRS recommends that taxpayers and their tax professionals leverage electronic filing channels, including IRS Free File or other certified e-file service providers. Furthermore, certain taxpayers in 12 States have the option to participate in the Direct File pilot program. Electronic filing offers the advantage of reducing mathematical inaccuracies and pinpointing potential tax credits or deductions for which the taxpayer may be eligible. It is imperative for taxpayers to conduct a thorough review of their tax returns to guarantee precision and compliance. Electing electronic filing and opting for direct deposit represent the most expeditious and secure methods to receive refunds.

USE THE CORRECT FILING STATUS

Tax software platforms are designed to mitigate errors by guiding users through the selection process of their tax return filing status. For this tax season 2024, individuals who are uncertain about their appropriate filing status can utilize the Interactive Tax Assistant available on IRS.gov. This tool aids individuals in determining the correct filing status, especially in situations where multiple statuses may be applicable.

DOUBLE-CHECK PERSONAL DETAILS

Taxpayers are required to provide precise information including the name, date of birth, and Social Security number (SSN) for each dependent listed on their individual income tax return. It is imperative that the SSN and individual’s name are entered accurately, reflecting the information as it appears on the Social Security card. In instances where a dependent or spouse does not possess an SSN and is ineligible to acquire one, an assigned Individual Taxpayer Identification Number (ITIN) should be furnished in place of the SSN.

FILE YOUR DIGITAL ASSETS TRANSACTIONS

All filers of Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120, and 1120S must indicate their response to the digital asset question by selecting “Yes” or “No”. This question must be addressed by all taxpayers, irrespective of whether they participated in digital asset transactions during the tax year 2023. Furthermore, taxpayers are obligated to report all income derived from digital asset transactions.

For comprehensive guidelines regarding when to affirm “yes” and instructions on reporting digital asset-related income, individuals are advised to refer to the IRS.gov Digital Assets section.

REPORT ALL TAXABLE INCOME

Failure to report income may result in penalties and interest. Income tax information can help prevent errors that slow down the process and help find missed deductions or credits. Taxpayers should have all their income information ready before they begin filing their taxes. IRS can even conduct tax audits on such filings and may ask for further documents or even visit the premises for field audits.

DOUBLE CHECK ROUTING AND ACCOUNT NUMBERS

Taxpayers have the flexibility to choose to have their federal income taxes deposited into one, two, or three accounts of their choice. Bank documentation containing correct numbers and account numbers is important, especially when a refund is required, to reduce the risk of delays or the refund being sent to an undesirable location. Taxpayers also have the opportunity to use their refunds to purchase US Savings Bonds, thus making the most of their tax refunds.

SIGN AND DATE THE TAX FILINGS

If filing a joint tax return, both spouses must sign and date the document. For those independently preparing and electronically submitting their taxes, authentication involves entering the adjusted gross income (AGI) from the previous year. Taxpayers seeking guidance can consult resources like “Validating Your Electronically Filed Tax Return” for assistance with any questions they may have.

ACCURATE MAILING ADDRESS

Taxpayers and tax professionals are urged to opt for electronic filing whenever possible. However, if a paper tax return must be submitted, it’s vital to confirm the accurate mailing address. This verification can be carried out on the official IRS website, IRS.gov, or by referring to the instructions provided with Form 1040. This precautionary step is essential for minimizing processing delays caused by incorrect mailing addresses.

KEEP A COPY

After completing their tax filing, individuals should proactively produce duplicates of their signed returns and any accompanying schedules for their records. Maintaining these copies simplifies future tax preparations and assists in revising calculations, especially when filing amended returns. Moreover, it is recommended that taxpayers hold onto records supporting their reported income, deductions, or credits until the statutory period for that specific tax return expires. This proactive approach ensures adherence to regulatory standards and streamlines potential inquiries or audits by tax authorities.

IRS AUDIT GROUP

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

The Internal Revenue Service (IRS) administers the Advanced Manufacturing Investment Credit (AMIC) in Tax Season 2024.  The objective is to motivate businesses to upgrade their manufacturing processes, and thereby boost competitiveness and stimulate economic growth.   In the fast-paced industrial environment, staying ahead often necessitates significant investments in advanced manufacturing technologies.

What is Advanced Manufacturing Investment Credit?

The AMIC (section 48D) is a targeted initiative under the Inflation Reduction Act (IRA) to boost the manufacturing sector, particularly in critical areas such as semiconductors and renewable energy. Offering a direct dollar-for-dollar tax reduction, it provides a significant financial incentive over deductions, spurring investments in advanced manufacturing technologies. This credit underlines the government’s focus on domestic manufacturing resurgence and supply chain security, with unique provisions for credit sale or transfer, enhancing its appeal and offering businesses strategic flexibility for growth and innovation in vital industries.

How much is the Credit for Tax Season 2024?

Eligible businesses may claim a tax credit equal to 25% of the qualified investment costs incurred for the purchase of advanced manufacturing equipment and related expenses. Qualified investments include expenditures on tangible property used in domestic manufacturing processes, such as machinery, equipment, and software specifically designed for advanced manufacturing activities.

Eligible Businesses for Tax Season 2024

To be eligible for the AMIC, a business must be engaged in manufacturing activities within the United States and must invest in qualified advanced manufacturing technology. Additionally, eligible taxpayers must obtain certification from the Department of Energy (DOE) or the National Institute of Standards and Technology (NIST) confirming that the equipment or process meets the criteria for advanced manufacturing.

For this overview, an advanced manufacturing facility is defined under proposed regulation section 1.48D-3(f) as a site primarily engaged in producing semiconductors or semiconductor manufacturing equipment. The facility’s assets must be central to semiconductor production or the creation of equipment to manufacture semiconductors.

Special Rules for Partnerships and S Corporations

Partnerships and S corporations may allocate the AMIC to their partners or shareholders according to their ownership interests in the business entity. This allows for greater flexibility in distributing tax benefits among multiple stakeholders and can enhance the attractiveness of the credit for businesses structured as pass-through entities.

How to Claim and What’s the Deadline?

To claim the AMIC, eligible businesses must file Form 8942, “Application for Certification of Qualified Investments Eligible for Credits and Grants Under the Qualifying Advanced Energy Project Credit,” with the IRS. Additionally, they must adhere to specific deadlines outlined by the IRS to ensure timely processing of their applications and claims.

The deadline for claiming the AMIC filing for tax year 2023 corresponds to the due date of Tax Season 2024 which is April 15, 2024. Taxpayers can include AMIC for the automatic extension that is due date on Oct. 15, 2024. It’s essential for businesses to adhere to filing deadlines to maximize their tax benefits and avoid potential penalties or interest charges.

In conclusion, the Advanced Manufacturing Investment Credit represents a valuable opportunity for businesses to invest in advanced manufacturing technologies while reducing their tax liabilities. By leveraging this incentive, companies can accelerate their growth, drive innovation, and strengthen their competitive position in the global marketplace. However, it’s crucial for businesses to carefully assess their eligibility, comply with applicable rules and deadlines, and seek guidance from tax professionals or the IRS when necessary.

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please get in touch with us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

Every year, based on the Federal Emergency Management Agency’s (FEMA) federally declared disaster areas, the IRS will implement administrative disaster tax relief measures. For the Tax Season 2024, the IRS made special tax law provisions to provide affected individuals and businesses with additional time to file returns, pay taxes, and complete other time-sensitive tasks. This assistance is specifically tailored for taxpayers who are affected by a disaster declared at the federal level, guaranteeing that they receive essential assistance during difficult circumstances. It is important to note that certain conditions may need to be met in order to qualify for the tax relief and provisions offered by the IRS. By following the established procedures and guidelines, disaster victims can benefit from the assistance provided by the government to alleviate the financial burden caused by the disaster.

The relief for the tax season 2024 extends the deadlines for filing and paying taxes that fell between Sept. 10, 2023, and June 17, 2024. This means that individuals and businesses affected in the disaster regions will now have until June 17, 2024, to submit their returns and settle any outstanding taxes from this period.

Who Qualifies for the Extension in Tax Season 2024?

In order to be eligible for an extension on filing your taxes, it is required that you are a resident or business situated in a region identified by the Federal Emergency Management Agency (FEMA) as a federally declared disaster area. This encompasses not only the main area impacted by the disaster but also the surrounding areas that have been affected.

Furthermore, the IRS is prepared to collaborate with any taxpayer residing outside the disaster zone but whose essential records are required to comply with a deadline falling within the extension period are situated in the impacted region. Taxpayers eligible for assistance and residing beyond the disaster zone must reach out to the IRS at 866-562-5227 for further guidance and support. This provision also encompasses individuals who participated in relief efforts and are associated with a reputable governmental or charitable institution.

What is included in the Extension?

Extension generally encompasses a range of tax deadlines, which can include filing income tax returns, making quarterly estimated income tax payments, and submitting different business tax returns. Additionally, extension can be utilized for other tax-related tasks, like requesting an extension for an individual tax return or making contributions to an IRA. The June 17, 2024, deadline will now apply to the following activities.

• Individual income tax returns and payments normally due on April 15, 2024.
• 2023 contributions to IRAs and health savings accounts for eligible taxpayers.
• 2023 quarterly estimated income tax payments normally due on Sept. 15, 2023, and Jan. 16, 2024.
• Quarterly payroll and excise tax returns normally due on Oct. 31, 2023, and Jan. 31 and April 30, 2024.
• Calendar-year partnership and S corporation returns normally due on March 15, 2024.
• Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024.
• Calendar-year tax-exempt organization returns normally due on May 15, 2024.

How to Claim the Extension?

Taxpayers residing in a federally declared disaster area who qualify for the extension do not have to take any action to receive it. The IRS will recognize individuals located in the designated disaster zone and grant them an extension on their tax deadlines without requiring any additional steps. In the event that you receive a penalty notification from the IRS due to late filing or payment of taxes, you have the option to contact the phone number provided on the notice to request a waiver of the penalty.

The tax relief measures have been implemented as a component of a well-coordinated federal initiative aimed at addressing the extensive harm inflicted by these calamities. These measures have been devised after careful evaluation of the local damage assessments conducted by FEMA, ensuring that the relief efforts are targeted toward the areas most affected by the disasters.

IRS Audit Group

IRS Audit Group consists of tax professionals, CPAs, enrolled agents, and tax attorneys.  We are located in Los Angeles; California and our primary area of expertise is IRS Tax Audit Representation.  However, our certified professionals cooperate and work with all IRS offices across the country.  Please contact us for more information.  https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

There are times when Taxpayers choose to represent themselves in an IRS audit or hire a tax professional to handle the case on their behalf. Those who want to avoid paying legal fees or who feel they have a thorough understanding of tax law may find self-representation to be intriguing. However, it also comes with its own set of risks and potential downsides. Here are some of the pros and cons of self-representation during an IRS audit, and helps taxpayers make an informed decision about how best to handle their audit.

Pros of Self-Representation

Cost Savings: One of the biggest benefits of self-representation is savings on account of Auditor fees. Taxpayers who represent themselves are not required to pay for tax audit representation services. Particularly for individuals or small-business owners who are on a limited budget, this gives considerable savings.

Better Control: The taxpayer has more influence over the process when they act as their own representative. They are in charge of gathering and submitting the required paperwork and data. This enables them to ensure that everything is conducted appropriately and to comprehend every step of the procedure.

Knowledge Enhancement: Self-representation can also be an excellent opportunity to learn more about tax law and the audit process. To make sure they are presenting their case appropriately, the taxpayer will need to read and comprehend tax laws and processes. The knowledge and experience gained will be useful for conducting business thereafter.

Cons of Self-Representation

Lack of Expertise: The audit process can be intimidating for taxpayers who are not familiar with tax law because it is complicated. An established tax audit representation company has experts who have extensive knowledge of tax law with years of experience dealing with the IRS. They are better prepared to identify any deductions or credits that taxpayer misses, and they can ensure that their representation is accurate and complete.

Reduced Emotional Distress: An IRS audit can be stressful, and self-representation can amplify that stress. The IRS correspondence can be handled entirely on behalf of the taxpayer by a tax audit representation firm, lessening their emotional burden and enabling them to concentrate on other facets of their lives.

Timesaving: Self-representation consumes time, and taxpayers who are familiar with the audit procedure would end up with mistakes and omissions. The documentation and correspondence with the IRS can be overseen by a qualified tax audit representation firm, saving the taxpayers’ time and guaranteeing that everything is done correctly.

Reduced Risk of Penalties: If a taxpayer makes a mistake in representation, it could result in penalties or interest charges. A tax professional has the knowledge to guarantee correct and thorough taxpayer representation, lowering the possibility of fines and interest charges.

Self-representation during an IRS audit seems like a cost-worthwhile option, but it is important to consider the potential drawbacks. The lack of proficiency, emotional distress, and time-consuming nature of the process can ultimately lead to mistakes, which can result in fines and interest charges. Therefore, it is generally suitable to seek the services of a professional tax audit representation company. Their experts can provide the necessary knowledge and experience to navigate the audit process successfully and minimize the risk of penalties and interest charges.

If you are facing an IRS audit and require assistance, reach out to the IRS Audit Group based in Los Angeles. We specialize in tax audit representation and aim to guide taxpayers through the audit process while safeguarding their rights. Our team has Lawyers, CPA,s and Enrolled agents who can carefully examine your tax records and returns, communicate with the IRS on your behalf, represent you during the audit, and negotiate with the IRS to help you avoid the stressful ordeal. We ensure that clients achieve the best possible outcome from the audit process. You can contact us to schedule a free consultation. https://irsauditgroup.com/contact/

Toll-Free: (888) 300-6670

Emergency Number: (310) 498-7508

[email protected]

The IRS tax filing deadline has ended for most individual taxpayers for the season 2022. In case, if you have not done the tax filing by the end of the deadline which was on April 18, 2022, it is important to know the consequences as well as other options. People who qualify for tax exempt or who don’t owe taxes will not receive any penalties and interests. But it is different for those who have the liability to pay tax. They need to file tax return as soon as they can do it in order to reduce penalties and interest.

For the tax season 2022, IRS advised that individuals who owe taxes need to file returns and pay as much as possible on/before Jun 14, 2022, to avoid hefty fines. It also recommended to use the electronic filing options for faster processing. Similarly, the fastest and easiest way to pay the taxed is with IRS Direct Pay.

IRS Late Filing Penalty Structure

Missing the deadline of June 14 will typically result in a failure-to-file penalty, which is also known as a minimum late filing penalty. The minimum fine is $435 or 100% of the unpaid tax, whichever is smaller, if the return is more than 60 days late. If the taxpayer owes $435 or less in taxes, the penalty will be equivalent to that amount. The minimum fine will be at least $435 if they owe more than that.

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%. Once the taxpayer files return, the late filing penalty will no longer be charged. In addition, once the tax is paid, the separate late-payment penalty and interest will also stop growing. None of these costs need not be calculated by the taxpayer. The IRS will instead send them a bill for any overdue sum.

Late Filing Options for Tax Season 2022

Even if the taxpayers have not filed the returns before the April deadline, they can do so electronically through Free-File service. Those who qualify can avail this free-file service until October 17, 2022. If you are not eligible for IRS Free File, then you can e-file using Free File Fillable Forms. The IRS paper forms used in this option are electronic counterparts. It helps individuals who are comfortable filing their own taxes where the e-filing does the part of the math.

Sometimes, taxpayers may miss the deadline because they were not able to pay the taxes, which in case they can opt for payment plan with the IRS. The best way to apply is to use the IRS Online Payment Agreement tool. Once the online process is complete, you’ll receive immediate notification of whether the agreement is approved. IRS provides two types of online payment plans as follows

• Short-term payment plan: If the entire amount owed, including taxes, penalties, and interest, is less than $100,000 and the payment period is 120 days or less.
• Long-term payment plan: If the total amount payable for the tax, penalties, and interest is less than $50,000 and the payment period is greater than 120 days. If IRS approves long-term payment plan, a setup fee can be charged depending on the taxpayers’ income.

If you are not eligible for an online payment plan, you may also request an installment agreement by submitting Form 9465, “Installment Agreement Request”, with the IRS. If the IRS approves your IA, a setup fee may apply depending on your income.

Can You Avoid the Penalties?

The penalties for late filing, late payment, and interest on unpaid taxes pile up quickly, so it’s crucial to file as soon as possible. A taxpayer who files after the deadline can, however, under some circumstances, be eligible for penalty relief. Those who received a penalty may call the IRS at the number listed on their notification and explain why they were unable to file and pay on time.

Administrative penalty reduction is frequently available to taxpayers who have a history of timely filing and payment. Generally, a taxpayer is eligible if they have been timely filing and paying taxes for the last three years and meet additional criteria.

IRS Audit Group is a Tax Audit Representation company in Los Angeles, California with a team of Tax Professionals, CPAs, Enrolled Agents, and Tax Attorneys. They are primarily specialized in IRS Audit Representation. We provide free consultation to understand your tax problems. Contact us: https://irsauditgroup.com/contact/

Toll-Free: (888) 300-6670

Emergency Number: (310) 498-7508

Email Address: [email protected]

The Section 501(c)(3) Internal Revenue Code specifies that any Tax-exempt organizations need to be organized and operated exclusively for exempt purposes. Also, it needs to ensure that none of its earnings inure to any private shareholder or individual.  In this context, the private inurement means that the assets of the organization must not be used to benefit a single person excessively.

Here are a few types of Exempt Organizations.

• Charitable Organizations
• Churches and Religious Organizations
• Private Foundations
• Political Organizations
• Other Non-profits

  The IRS requires most tax-exempt organizations to file annual tax returns. Even though most tax-exempt non-profit organizations do not pay federal taxes, these entities are required to file an informational return with the IRS.  Hence, such entities need to file their IRS return for this tax season 2022.

 The annual reporting return for tax-exempt organizations is referred to as a Form 990. Most of the tax-exempt organizations need to file an annual return, and it can be done electronically. The financial activity of an organization determines which form it must file, as shown in the chart below.

 The deadline for the tax season 2022 has been fixed as May 16 to file IRS return by the tax-exempt organizations. Taxpayers who need more time to file beyond the May 16 deadline can request Form 8868 which is the Application for Extension of Time to File an Exempt Organization Return. This form will provide a 6-month automatic extension. Extending the time to file a return does not extend the deadline to pay tax in circumstances where tax is payable. Organizations requesting an extension are encouraged to complete Form 8868 electronically, according to the IRS.

Extended Support From IRS

IRS helps taxpayers, board members, volunteers, and officers in filling returns to comply with their tax filing obligations. Therefore, it lists few modernized e-File (MeF) providers who have passed the IRS Assurance Testing System (ATS) requirements for Software Developers of electronic Exempt Organizations. The list of such service providers can be found using the below IRS webpage

https://www.irs.gov/charities-non-profits/tax-year-2021-exempt-organizations-modernized-e-file-mef-providers

IRS Audit Group is a Tax Audit Representation firm in Los Angeles, California. We are a team of tax attorneys having hands-on experience in dealing with IRS audit process. We help you file your tax return for 2022 complying with all obligations and represent you on IRS audit. Contact us to get free consultation to understand your issues. https://irsauditgroup.com/contact/

Toll Free: (888) 300-6670

Emergency 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/

Toll Free: (888) 300-6670

Emergency Number: (310) 498-7508

Email address: [email protected]

IRS defines a “GIG” economy as sharing economy where individuals earn income by providing on-demand work, services, or goods per the flexibility of both parties.  It often involves a digital platform like a website or mobile application.  Examples include ride-hailing apps, food delivery apps, and holiday rental apps.  It’s a growing segment, bringing economic benefits of productivity and employment.

Who has to File Tax Returns Under Gig Economy?

The gig economy is taxable.  Taxpayers need to report the income in their filings, even if the income is.

• From part-time, temporary, or side work,
• Not reported on an information return form – like a Form 1099-K, 1099-MISC, W-2, or other income statement or
• Paid in any form, including cash, property, goods, or virtual currency.

Tax Slab for Gig Workers

A gig worker who is primarily dependent on the Gig Economy needs to consider taxes to be paid as a self-employed taxpayer.  They need to file tax returns for 2021 if their income from self-employment equals or exceeds $400.  Therefore, it is important to keep a record of all receipts to track income, deduct expenses, and complete tax returns.

How to File Your Income Tax Returns as Gig Workers?

Independent contractors or Gig workers, whether it is a full-time, part-time or side job, need to file their tax returns for 2021 using the below forms.

• Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S.  Tax Return for Seniors
• Schedule SE (Form 1040), Self-Employment Tax
• Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship)

 In case the filed tax return needs to be modified, use Form 1040-X, Amended U.S.  Individual Income Tax Return.

IRS provides various options to guide the taxpayers in filing their returns.  Below are a few options that can be utilized by any individuals

• IRS Free File — Use free tax prep software or fillable forms based on your income and the forms you must file.
• Volunteer Income Tax Assistance site — Get free, in-person filing help near you.
• Authorized e-file provider — Search the list of tax professionals approved by the IRS for e-filing.
• File your return by mail — Find addresses by the state to mail your tax return.

IRS Audit Group is a Los Angeles-based Tax Audit Representation firm that helps in resolving common tax problems and provides points of clarification on issues such as tax relief, tax fraud, California state tax issues, and other tax debt-related circumstances.  Our certified tax attorneys help taxpayers in facilitating their filings as well as after filing issues like IRS audits.  Contact us to get a free consultation from our staff members to help us understand your problems.  Email: [email protected], Phone: 1-888-300-6670

https://irsauditgroup.com/contact/