Category Archives: taxes

Are you able file your taxes or comprehend what you owe Uncle Sam? There is a strong chance you’re confused about tax regulations. On the bright side, we’ve compiled a list of answers to 5 common tax questions you may be asking — including if you should hire a tax preparer, if you should file if you’re a college student, when you’ll receive your tax refund and more.

1. Should I hire a tax preparer?

If you choose to hire a tax professional is subject to your comfort level with the tax-filing procedure and the convolution of your return. If you’re seeking a tax preparer with a greater degree of experience, consider a CPA or E.A. Both professionals are required pass specific exams to get licensed.

2. What is the standard deduction?

The standard deduction is an allocated amount of money of which you aren’t taxed. The total of the standard deduction that you claim is subject on your tax status and the year that you’re filing. Taxes filed in 2019, the standard deduction $12,000 for filing single and $24,000 for married couples filing together.

3. When will my tax refund get to me?

When your tax refund will get to you is subject on how and when you filed. According to the IRS 90% of federal tax refunds are distributed within twenty-one days, and details are usually available within a day from when the IRS receives an e-filed tax return or 4 weeks following them receiving a traditional paper return. Utilize the IRS Where’s My Refund? device and the IRS2Go app to track it.

4. Should I file taxes if I’m enrolled in college?

Prior to you filing taxes as a student going to college, think about your income and if your parents will claim you as a dependent on their taxes. Students that earn less than $12,000 don’t need to file a tax return but might still gain from filing if taxes were withheld from their paycheck or want to claim specific tax benefits like the American opportunity tax credit.

5. How can I get the largest tax refund this year?

To receive the largest tax refund this year, begin to think about your tax circumstances early, preferably prior to the tax year ending. Next, consider how to make the most out of deductions through itemizing if you’re able to, declare tax credits and deductions in which you qualify for and give to your retirement accounts. When your tax situation is convoluted, think about working with an experience tax preparer.

6. How do I select the preferable tax-filing software?

When evaluating the preferable tax-filing software for your circumstance, think about the costs and services offered. A great place to begin is with the dozen software businesses that work alongside the IRS-affiliated Free File Alliance. They are IRS approved and satisfy specific security and privacy conditions.

7. Who is established as a dependent on my taxes?

Dependents may include qualifying children, family members and other people that you support. Dependents need to satisfy certain age, income and housing conditions.

8. How can I evade IRS tax scams?

Evade typical IRS tax scams by handling suspicious or out of left field communications from alleged IRS officials with a healthy suspicion. The IRS will usually reach out by regular mail first, so be cautious of e-mails, any texts or phone calls insisting to be from the IRS. Additionally, be vigilant for poor grammar, threats of calling the police and demands for payments through gift cards or wire transfers.

9. Should I choose direct deposit?

Yes, when you want to get your tax refund as fast as possible, choosing direct deposit can be faster than, for instance, petitioning a check to be mailed out.

10. Can I decrease my chances of getting audited?

To decrease the chance of a tax audit, make sure there are no errors, disclose all of your income, retain correct records and stay away from illegal or inappropriate tax moves like exaggerating charitable donations.

Whereas these answers to common tax questions may help you begin in fulfilling your tax responsibilities, you might still have questions as you start to file your return. If you see any questions you do not see on this list, contact us and we will be more than happy to answer them.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

Many folks are hoping for a fourth round of stimulation. However, a succession of catastrophic occurrences will almost certainly be required for a follow-up round to be permitted.

Many folks were ecstatic to get $1,400 stimulus cheques when the American Rescue Plan was signed into law in mid-March. In fact, many people are still hoping for a fourth stimulus check, if not this year, then early next year.

However, the chances of a second stimulus round are dwindling at this moment. The economy is substantially better now than when the American Rescue Plan was enacted. We’re also in a different position with the pandemic now that coronavirus vaccinations are widely available.

Still, it’s feasible that another stimulus package will be announced in the near future. However, these circumstances would very certainly have to occur in order for that to happen.

1. The unemployment rate rises dramatically.

The national unemployment rate hit a new high of 14.8 percent in April of 2020. The unemployment rate had dropped to 6% by March 2021. The unemployment rate was 5.9% in June, the most recent month for which data is available. As businesses prepare to reopen in full, there’s a high possibility the unemployment rate will continue to fall. It will be tough to justify another stimulus package if unemployment continues to fall. However, if the unemployment situation continues to deteriorate, another round of stimulus payments may be made. To be clear, the unemployment rate would have to rise significantly for this to happen. It won’t be enough to warrant a fourth stimulus check if it increases to 6% or 6.1 percent in July or August.

2. The outbreak becomes more severe.

Unfortunately, the highly transmissible Delta variation is currently the most common COVID-19 strain in the country, and the outbreak has been spreading in recent weeks. Fortunately, things aren’t as bad as they were at the onset of the pandemic or even during the winter surges last year. However, the situation is so dire that the CDC recently reversed its position on mask use and now recommends that even fully vaccinated adults use a mask when indoors in a public setting. If the disease truly spreads, it could lead to more relief negotiations, which could result in another stimulus check.

3. States begin to shut down once more.

Many states enforced lockdowns early in the pandemic to try to stop COVID-19 from spreading. This meant that nonessential firms were prohibited from operating, resulting in the loss of millions of jobs in a matter of weeks. While we may not see the same level of drastic shutdowns at this point in the epidemic, states may impose limitations and capacity constraints on enterprises once more. As a result, many local economic recovery efforts may be hampered. And if that happens, it will be easier to argue that the public requires more direct assistance.

You don’t want another stimulus check.

While a fourth stimulus check would be ideal, the reality is that none of the aforementioned scenarios should be desired. While it would be premature to rule out another stimulus package, we should concentrate our efforts on hoping we won’t need one. Besides, there are other methods to acquire a windfall besides a stimulus check, such as getting a side job to supplement your income. Parents who qualify for the Child Tax Credit will get monthly payments until the end of the year, as well as a lump sum payment in 2022. While more stimulus money may not be available, there are alternative methods for Americans to enhance their bank accounts.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

If you are a qualified taxpayer or authorized representative (Power of Attorney) you can apply for a payment plan (including installment agreement) online to pay off your balance over time. Read on to learn more. You can a payment plan at: https://www.irs.gov/payments/online-payment-agreement-application

Qualification

Your specific tax situation will determine which payment options are available to you. Payment options include full payment, a short-term payment plan (paying in 120 days or less) or a long-term payment plan (installment agreement) (paying monthly).

You may qualify to apply online if:

• Long-term payment plan (installment agreement): You owe $50,000 or less in combined tax, penalties and interest, and filed all required returns.
• Short-term payment plan: You owe less than $100,000 in combined tax, penalties and interest.

If you are a sole proprietor or independent contractor, apply for a payment plan as an individual.

Note: Setup fees may be higher if you apply for a payment plan by phone, mail, or in-person. Get more information on other payment plan options and fees.

Payment Plan Applications

• Name exactly as it appears on your most recently filed tax return
• Valid e-mail address
• Address from most recently filed tax return
• Date of birth
• Filing status
• Your Social Security Number or Individual Tax ID Number (ITIN)
• Based on the type of agreement requested, you may also need the balance due amount
• To confirm your identity, you will need:
  • financial account number or
  • mobile phone registered in your name or
  • activation code received by postal mail (takes 5 to 10 business days)
• If you previously registered for an Online Payment Agreement, Get Transcript, or any Identity Protection PIN (IP PIN), you should log in with the same user ID and password. You will need to confirm your identity by providing the additional information listed above if you haven’t already done so.

Costs

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

Unless you’re a tax professional, chances are capital gains taxes during a divorce are confusing. There are many rules surrounding capital gains. Here are a few:

• Capital gains taxes may occur when you sell an asset for a profit.
• The percentage of capital gains taxes you owe depends on your tax bracket.
• During a divorce, there is an exemption up to a certain amount on your primary residence, but you need to have lived there for a specific amount of time. Contact a professional for more information.
• Financial investments (stocks, bonds, mutual funds, ETF’s) may have “unrealized” capital gains – which will be taxed upon sale. They should be taken into account when dividing these assets.

Navigating Capital Gains Taxes During a Divorce

Divorce can create a lot of confusion about your financial picture. You are dividing or signing over your rights to assets and navigating the complex process of who gets what. Things can get overwhelming quickly. If you have to sell the family home or other properties, you may be concerned about paying capital gains taxes. There are several questions that are helpful to ask a financial professional.

• Which party is responsible for the capital gains taxes?
• How do we clearly spell out who pays what?
• How much will the capital gains taxes be?
• Is there a more tax efficient way to handle the sale of our house(s)?
• We’ve lived in the primary residence a long time, how much of the profit can each of us exclude from capital gains taxes?
• Should we continue to co-own the home?

Each situation is unique. Consulting a financial professional can allow you to understand the benefits and consequences of your decisions. A professional will be able to review your situation and offer options, as well as the advantages and disadvantages of each. Navigating this situation with a professional can prevent miscommunication and allow each party to make informed decisions.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

Here is what you should know about divorce and filing taxes in Arizona so that you don’t make a penalty-incurring mistake. Read on to learn more

Divorce Attorney Fees And Taxes

Clients in divorce cases often want to know if attorney fees are tax deductible. Typically, the answer is no. The IRS does allow a minor exception for divorce attorney fees paid during “collection or production of gross income.” This clause doesn’t cover a majority of fees you would pay a divorce attorney. But you can ask your divorce attorney in Scottsdale whether the fees you pay are tax deductible.

Your Filing Status Determines Tax Liabilities

When you file your IRS form, you are given three options to choose from as your civil status: married, single, or head of household. Tax liabilities for each category slightly differs, so the box you check matters a great deal for your individual tax obligations. If the divorce is not yet final, it can be difficult to determine whether to file as a single person or jointly with your soon-to-be-ex. You can consult with a lawyer to decide what to do. Or you could calculate what you owe under all three categories and determine which is most advantageous to you.

Spousal Support and Child Support are Separate Categories

When filing your taxes, do not confuse alimony or spousal support with child support. Spousal support, which is sometimes referred to as alimony, is paid by one former spouse to another, for the benefit of the recipient. Child support, on the other hand, is paid to an adult who oversees the well-being of a child, but for the direct benefit of the child.

If you are a custodial parent recipient of child support, you don’t have to list it as taxable income. If you are the parent paying child support, you cannot obtain a tax deduction for the amount paid.

Spousal support works the other way. The individual who receives alimony payment must list it as taxable income. So it won’t affect this tax season but will start next year. Under a new law, alimony tax deduction is eliminated. The tax obligation is reversed. The spouse that pays the alimony will not be able to report a deduction, while the spouse that receives alimony no longer has to report it as taxable income.

Property Division May Be Taxed When Sold

When spouses divide property during a divorce, it is not a taxable act under the IRS Code. However, there’s a hidden clause called “tax basis” that might result in a tax payment. Tax basis is the purchase price of a property that is used to determine capital gains tax. Not all properties, such as a residence, incur capital gains tax following a divorce. However, certain property, such as investments, may incur capital gains tax when sold after a divorce.

For the most part, your divorce decree would determine how taxes should be paid for some property categories, such as IRAs.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

The IR says Tax Season shall commence on February 12, 2021. Below are charts to show when you should expect your refund.

* = Returns with EITC or CTC may have refunds delayed until March to verify credits.

** = Filing during peak season can result in slightly longer waits.

IMPORTANT: If you file electronically (using an online tax program or preparer), the IRS will notify you of the actual date they “accepted” your return. This is often 1-3 days from the time you actually hit the “file” or “submit” button, and it is this date that you need to use for the above chart.

Taxpayers who mail a paper version of their income tax return can expect at least a 3-4 week delay at the front-end of the process, as the return has to be manually entered into the IRS system before it can be processed.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

This is from IR-2020-272 published by the IRS on December 8, 2020 advising tax payers on new features when filing their taxes in 2021. Read on to learn more:

This year, there are some key items to consider involving credits, deductions and refunds:

Recovery Rebate Credit/Economic Impact Payment. Taxpayers who received an Economic Impact Payment, should keep Notice 1444, Your Economic Impact Payment, with their 2020 tax records. They may be eligible to claim the Recovery Rebate Credit on their tax year 2020 federal income tax return if:

• they didn’t receive an Economic Impact Payment, or
• their Economic Impact Payment was less than $1,200 ($2,400 if married filing jointly for 2019 or 2018), plus $500 for each qualifying child they had in 2020.

If a taxpayer didn’t receive the full amount of the Economic Impact Payment for which they were eligible, they may be able to claim the Recovery Rebate Credit when they file in 2021. Individuals do not need to complete information about the Recovery Rebate Credit on tax year 2020 Form 1040 or 1040-SR when filing in 2021, unless eligible to claim an additional credit amount.

Interest on refunds taxable. Taxpayers who received a federal tax refund in 2020 may have been paid interest. Refund interest payments are taxable and must be reported on federal income tax returns. In January 2021, the IRS will send Form 1099-INT to anyone who received interest totaling $10 or more.

Charitable deduction changes. New this year, taxpayers who don’t itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For more information, read Publication 526, Charitable Contributions.

Refunds. The IRS always cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and processing may take longer. For example, the IRS, along with its partners in the tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud. Just like last year, refunds for tax returns claiming the Earned Income Tax Credit or Additional Child Tax Credit, cannot be issued before mid-February. This applies to the entire refund, even the portion not associated with these credits.

The IRS reminds taxpayers that the fastest and safest way to receive a refund is to combine direct deposit with electronic filing including the IRS Free File program. Taxpayers can track their refund using the Where’s My Refund? tool.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

The Inland revenue Service recently announced the 2021 tax year annual inflation adjustments for upwards of sixty provisions. The details below are from: https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2021

Highlights of changes in Revenue Procedure 2020-45

The Consolidated Appropriation Act for 2020 increased the amount of the minimum addition tax for failure to file a tax return within 60 days of the due date. Beginning with returns due after Dec. 31, 2019, the new additional tax is $435 or 100 percent of the amount of tax due, whichever is less, an increase from $330. The $435 additional tax will be adjusted for inflation.

The tax year 2021 adjustments described below generally apply to tax returns filed in 2022.

The tax items for tax year 2021 of greatest interest to most taxpayers include the following dollar amounts:

• The standard deduction for married couples filing jointly for tax year 2021 rises to $25,100, up $300 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,550 for 2021, up $150, and for heads of households, the standard deduction will be $18,800 for tax year 2021, up $150.
• The personal exemption for tax year 2021 remains at 0, as it was for 2020; this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
• Marginal Rates: For tax year 2021, the top tax rate remains 37% for individual single taxpayers with incomes greater than $523,600 ($628,300 for married couples filing jointly). The other rates are:
  • 35%, for incomes over $209,425 ($418,850 for married couples filing jointly);
  • 32% for incomes over $164,925 ($329,850 for married couples filing jointly);
  • 24% for incomes over $86,375 ($172,750 for married couples filing jointly);
  • 22% for incomes over $40,525 ($81,050 for married couples filing jointly);
  • 12% for incomes over $9,950 ($19,900 for married couples filing jointly).
  • The lowest rate is 10% for incomes of single individuals with incomes of $9,950 or less ($19,900 for married couples filing jointly).
• For 2021, as in 2020, 2019 and 2018, there is no limitation on itemized deductions, as that limitation was eliminated by the Tax Cuts and Jobs Act.
• The Alternative Minimum Tax exemption amount for tax year 2021 is $73,600 and begins to phase out at $523,600 ($114,600 for married couples filing jointly for whom the exemption begins to phase out at $1,047,200). The 2020 exemption amount was $72,900 and began to phase out at $518,400 ($113,400 for married couples filing jointly for whom the exemption began to phase out at $1,036,800).
• The tax year 2021 maximum Earned Income Credit amount is $6,728 for qualifying taxpayers who have three or more qualifying children, up from a total of $6,660 for tax year 2020. The revenue procedure contains a table providing maximum Earned Income Credit amount for other categories, income thresholds and phase-outs.
• For tax year 2021, the monthly limitation for the qualified transportation fringe benefit remains $270, as is the monthly limitation for qualified parking.
• For the taxable years beginning in 2021, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements remains $2,750. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $550, an increase of $50 from taxable years beginning in 2020.
• For tax year 2021, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,400, up $50 from tax year 2020; but not more than $3,600, an increase of $50 from tax year 2020. For self-only coverage, the maximum out-of-pocket expense amount is $4,800, up $50 from 2020. For tax year 2021, participants with family coverage, the floor for the annual deductible is $4,800, up from $4,750 in 2020; however, the deductible cannot be more than $7,150, up $50 from the limit for tax year 2020. For family coverage, the out-of-pocket expense limit is $8,750 for tax year 2021, an increase of $100 from tax year 2020.
• For tax year 2021, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $119,000, up from $118,000 for tax year 2020.
• For tax year 2021, the foreign earned income exclusion is $108,700 up from $107,600 for tax year 2020.
• Estates of decedents who die during 2021 have a basic exclusion amount of $11,700,000, up from a total of $11,580,000 for estates of decedents who died in 2020.
• The annual exclusion for gifts is $15,000 for calendar year 2021, as it was for calendar year 2020.
• The maximum credit allowed for adoptions for tax year 2021 is the amount of qualified adoption expenses up to $14,440, up from $14,300 for 2020.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

Are you able file your taxes or comprehend what you owe Uncle Sam? There is a strong chance you’re confused about tax regulations. On the bright side, we’ve compiled a list of answers to 5 common tax questions you may be asking — including if you should hire a tax preparer, if you should file if you’re a college student, when you’ll receive your tax refund and more.

1. Should I hire a tax preparer?

If you choose to hire a tax professional is subject to your comfort level with the tax-filing procedure and the convolution of your return. If you’re seeking a tax preparer with a greater degree of experience, consider a CPA or E.A. Both professionals are required pass specific exams to get licensed.

2. What is the standard deduction?

The standard deduction is an allocated amount of money of which you aren’t taxed. The total of the standard deduction that you claim is subject on your tax status and the year that you’re filing. Taxes filed in 2019, the standard deduction $12,000 for filing single and $24,000 for married couples filing together.

3. When will my tax refund get to me?

When your tax refund will get to you is subject on how and when you filed. According to the IRS 90% of federal tax refunds are distributed within twenty-one days, and details are usually available within a day from when the IRS receives an e-filed tax return or 4 weeks following them receiving a traditional paper return. Utilize the IRS Where’s My Refund? device and the IRS2Go app to track it.

4. Should I file taxes if I’m enrolled in college?

Prior to you filing taxes as a student going to college, think about your income and if your parents will claim you as a dependent on their taxes. Students that earn less than $12,000 don’t need to file a tax return but might still gain from filing if taxes were withheld from their paycheck or want to claim specific tax benefits like the American opportunity tax credit.

5. How can I get the largest tax refund this year?

To receive the largest tax refund this year, begin to think about your tax circumstances early, preferably prior to the tax year ending. Next, consider how to make the most out of deductions through itemizing if you’re able to, declare tax credits and deductions in which you qualify for and give to your retirement accounts. When your tax situation is convoluted, think about working with an experience tax preparer.

6. How do I select the preferable tax-filing software?

When evaluating the preferable tax-filing software for your circumstance, think about the costs and services offered. A great place to begin is with the dozen software businesses that work alongside the IRS-affiliated Free File Alliance. They are IRS approved and satisfy specific security and privacy conditions.

7. Who is established as a dependent on my taxes?

Dependents may include qualifying children, family members and other people that you support. Dependents need to satisfy certain age, income and housing conditions.

8. How can I evade IRS tax scams?

Evade typical IRS tax scams by handling suspicious or out of left field communications from alleged IRS officials with a healthy suspicion. The IRS will usually reach out by regular mail first, so be cautious of e-mails, any texts or phone calls insisting to be from the IRS. Additionally, be vigilant for poor grammar, threats of calling the police and demands for payments through gift cards or wire transfers.

9. Should I choose direct deposit?

Yes, when you want to get your tax refund as fast as possible, choosing direct deposit can be faster than, for instance, petitioning a check to be mailed out.

10. Can I decrease my chances of getting audited?

To decrease the chance of a tax audit, make sure there are no errors, disclose all of your income, retain correct records and stay away from illegal or inappropriate tax moves like exaggerating charitable donations.

Whereas these answers to common tax questions may help you begin in fulfilling your tax responsibilities, you might still have questions as you start to file your return. If you see any questions you do not see on this list, contact us and we will be more than happy to answer them.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.