Tehachapi's Online Community News & Entertainment Guide
Tehachapi's Online Community News & Entertainment Guide
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It's been an interesting year with important tax changes that will impact you. Here are some of the changes and issues you need to know about. Tax return due dates: • Individuals must file returns by April 15 for the 2023 tax year. • Partnerships must file returns by the 15th day of the third month following the close of the taxable year (March 15 for calendar-year taxpayers); • C corporation returns are generally due by the 15th day of the fourth month following the close of the taxable year...
Extensions Whether you file a tax return by the April due date, or obtain an extension to file, filing an annual tax return is mandatory if your income is above a certain level, which will vary depending upon your filing status. Filing an extension will grant you another six months for individuals and corporations (five month extension for partnerships, LLCs, estates and trusts) to file the tax return. Filing an extension, however, will not allow you to delay payment on any tax you may owe. The...
Taxpayers with one or more qualifying children may be able to claim a tax credit of up to $2,000 per qualifying child. The childcare credit is generally a nonrefundable credit that is limited to regular tax liability plus alternative minimum tax liability. However, a portion of the credit is refundable for certain taxpayers. The refundable portion of the additional tax credit for any qualifying child cannot exceed $1,500. The additional childcare credit is the smaller of 1.) the amount of the ch...
Proving tax deductions without cancelled checks There is a growing trend toward remote deposit of checks. Because of the increasing sophistication of smartphones, you can now photograph a check written out to you and digitally send it to your bank for deposit. Most banks discontinued the practice of retaining a paper version or copy of your checks. Banks are allowed to truncate each of your checks, create a new electronic negotiable instrument called a substitute check and then destroy the...
Do I need to file a tax return? The answer depends on your filing status, your age and the type of income you earn. Each person is allowed to earn a certain amount of income before they are required to file a tax return. For 2022 tax returns, individuals are not allowed a personal exemption deduction, but are still entitled to a standard deduction of $12,950 for a single filer. Hence, an individual can have $12,950 of taxable income before being taxed if under age 65. If age 65 or over, an addit...
Tax-related identity theft occurs when someone uses a taxpayer's stolen Social Security number and name to file a tax return to claim a fraudulent refund. Often the taxpayer doesn't know this has occurred until they try to file a legitimate tax return and have their return rejected with an error code stating that a return has already been filed using that name and Social Security number. This article discusses the steps to take when a taxpayer's identity has been stolen, along with helpful sugge...
It's been an interesting year with important tax changes that will impact you. Here are some of the changes and issues you need to know about. Tax return due dates: • Individuals must file returns by April 18, 2023, for the 2022 tax year. • Partnerships must file returns by the 15th day of the third month following the close of the taxable year (March 15 for calendar-year taxpayers); • C corporation returns are generally due by the 15th day of the fourth month following the close of the taxab...
Trusts have been used as an integral part of sophisticated tax and financial arrangements for centuries. Exactly how they are used depends on a person's particular goals, current tax rules and other factors. Hopefully this article helps you to understand some ways a trust may help you. A trust is an arrangement in which title to property is held by someone for another's benefit. The trust can be established to benefit the person creating it (the grantor), or to benefit another (the beneficiary)....
Extensions Whether you file a tax return by the April due date, or obtain an extension to file, filing an annual tax return is mandatory if your income is above a certain level, which will vary depending upon your filing status. Reasons to file an extension include waiting for an important document such as a late 1099 or K-1 form showing income which needs to be reported, you may be overseas and unable to file by the April deadline, or you may just be a habitual procrastinator. Whatever the...
Tax-related identity theft occurs when someone uses a taxpayer’s stolen Social Security number and name to file a tax return to claim a fraudulent refund. Often the taxpayer doesn’t this has occurred until they try to file a legitimate tax return and have their return rejected with an error code stating that a return has already been filed using that name and Social Security number. This article discusses the steps to take when a taxpayer’s identity has been stolen, along with helpful sugge...
Donations of money or non-cash items to a charity (church or non-profit organization) are tax deductible if you itemize deductions on your tax returns and you comply with acknowledgement/substantiation rules to claim your deduction. Those who do not itemize and use the standard deduction, $300 for single filers and $600 for married filing jointly filers, of qualified charitable cash contributions are deductible on line 12b of Form 1040. As many of you will be filing tax returns shortly to claim...
Child Tax Credit The Child Tax Credit is increased and made fully refundable but ONLY for the 2021 tax year. The IRS has: • Increased the amount of the credit from $2,000 to $3,000 per child ($3,600 for a child under age 6) for filers under specific AGI thresholds; • Made the credit fully refundable (typically, only $1,400 is refundable); • Repealed the requirement that taxpayers must have earned income of at least $2,500 in order to qualify for a refund of the credit; • Allowed for advance...
It's been an interesting year with important tax changes that will impact you. Here are some of the changes and issues you need to know about. Tax return due dates: • Individuals must file returns by April 18, 2022, for the 2021 tax year; • Partnerships must file returns by the 15th day of the third month following the close of the taxable year (March 15 for calendar-year taxpayers); • C corporation returns are generally due by the 15th day of the fourth month following the close of the taxab...
There are several businesses in town who provide bookkeeping, payroll and/or income tax preparation services. How do you determine which business is worthy of your trust? Our office (Moats & Hebebrand CPAs) think the answer to that question is based on how well the business meets the following criteria: 1) Length of time in Tehachapi 2) Credentials and experience of the individuals performing the services 3) Availability of the individuals performing the services 4) Attitude of the firm performi...
Extensions Whether you file a tax return by the April due date, May due date for 2020, or obtain an extension to file, filing an annual tax return is mandatory if your income is above a certain level, which will vary depending upon your filing status. Filing an extension will grant you another six months for individuals and corporations (five month extension for partnerships, LLCs, estates and trusts) to file the tax return. Filing an extension, however, will not allow you to delay payment on...
Blast from the past. There was a game show on television (originally hosted by Johnny Carson and Ed McMahon). There were three couples on the show as contestants, Johnny Carson would ask a question of each couple, and the man would then decide whether to answer the question himself or ”trust” the woman to do so. Each couple was awarded money for a correct answer, and the couple with the most money at the end of the show won. If the couples were tied in winnings, they were then asked a que...
Tax-related identity theft occurs when someone uses a taxpayer's stolen Social Security number and name to file a tax return to claim a fraudulent refund. Often the taxpayer doesn't know this has occurred until they try to file a legitimate tax return and have their return rejected with an error code stating that a return has already been filed using that name and Social Security number. This article discusses the steps to take when a taxpayer's identity has been stolen, along with helpful...
Do I need to file a tax return? The answer depends on your filing status, your age and the type of income you earn. Each person is allowed to earn a certain amount of income before they are required to file a tax return. For 2020 tax returns, individuals are not allowed a personal exemption deduction, but are still entitled to a standard deduction of $12,400 for a single filer. Hence, an individual can have $12,400 of taxable income before being taxed if under age 65. If age 65 or over, an...
Foreign Bank Account Traps – If you have any bank account, retirement account, investment account and/or business ownership interest with a value of $10,000 or more in a foreign country, you must advise us since special reporting rules now apply. Failure to disclose this on your tax return could result in severe penalties, as well as additional fees in representing you in any dispute with the Internal Revenue Service. The United States has negotiated agreements with foreign countries to r...
What a year we had! The surging pandemic, confusion over who gets a stimulus payment and an overwhelmed IRS workforce still trying to catch up on last year's delayed tax season. The tax season can be frustrating under normal circumstances especially if you're trying to reach the IRS spokesman. This year may prove to be an extreme exercise in patience. We are going into an unprecedented tax season with a bevy of changes as a result of the novel Coronavirus. This is not the year to procrastinate....
Extensions Whether you file a tax return by the April due date, or obtain an extension to file, filing an annual tax return is mandatory if your income is above a certain level, which will vary depending upon your filing status. Filing an extension will grant you another six months for individuals and corporations (five month extension for partnerships, LLC's, estates and trusts) to file the tax return. Filing an extension, however, will not allow you to delay payment on any tax you may owe....
Tax-related identity theft occurs when someone uses a taxpayer's stolen Social Security number and name to file a tax return to claim a fraudulent refund. Often the taxpayer doesn't know this has occurred until they try to file a legitimate tax return and have their return rejected with an error code stating that a return has already been filed using that name and Social Security number. This article discusses the steps to take when a taxpayer's identity has been stolen, along with helpful...
Do I need to file a tax return? The answer depends on your filing status, your age and the type of income you earn. Each person is allowed to earn a certain amount of income before they are required to file a tax return. For 2019 tax returns, individuals are not allowed a personal exemption deduction, but are entitled to a standard deduction of $12,200 for a single filer. Hence an individual can have $12,200 of taxable income before being taxed if under age 65. If age 65 or over, an additional...
Owners of pass-through entities (e.g. partnerships, S corporations, and sole proprietors) may be entitled to a section 199A deduction for qualified business income ("QBI"). Under section 199A, certain taxpayers may be entitled to a deduction up to 20% of QBI. While this deduction potentially creates a substantial tax benefit for owners, it's complicated. There are complex rules to determine qualification for the deduction. Moats & Hebebrand CPAs are here to help. Foreign Bank Account Traps If yo...
The federal standard deduction for: • Married filing a joint return has increased from $24,000 to $24,400. • Head of Household has increased from $18,000 to $18,350. • Single from $12,000 to $12,200. • Married filing separately from $12,000 to $12,200. Those who have itemized in the past may still have to keep track of deductions for the State of California. Dependent deductions are replaced with credits. Although the deduction for exemptions is repealed, the definition of a dependent is not cha...
