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Hug Your Tax Professional: The IRS Is At It Again January 20, 2022
I was hoping that the 2022 Tax Season (which begins for individuals on Monday) would be more pleasant than the last two. Yes, the IRS didn’t cause Covid; however, as the National Taxpayer Advocate noted in her recent report the IRS’s response has been (to put it charitably) ‘lacking.’ It doesn’t look like things are […]
Russ
Frozen Returns: If You Made an Extension Payment on May 17th And Haven’t Received Your Refund…. January 12, 2022
Yesterday, a client of mine called asking about her 2020 tax refund. I assumed she was one of the unlucky individuals whose return fell out of IRS processing and is stuck waiting to be reviewed. However, she told me that her return didn’t even show in the IRS’s “Where’s My Refund.” I confirmed that–and […]
Russ
Tax Season (For Individuals) to Begin on January 24th January 10, 2022
The IRS announced today that Tax Season will begin on Monday, January 24th. That’s the first date that electronically filed returns (and extensions) for the 2021 tax year will be accepted for individuals. (Businesses can already file their 2021 returns.) Do note that almost every tax professional uses software, and that some forms may not […]
Russ
It’s Time to Generate 2021 1099s January 4, 2022
It’s time for businesses to send out their annual information returns. These are the Form 1099s that are sent to to vendors when required. Let’s look first at who does not have to receive 1099s: Corporations (except attorneys) Entities you purchased tangible goods from Entities you purchased less than $600 from (except royalties; the limit […]
Russ
It’s Time to Start Your 2022 Mileage Log January 3, 2022
I’m going to start the new year with a couple reposts of essential information. Yes, you do need to keep a mileage log: Monday will be the first business day of the new year for many. You may have resolved to keep good records this year (at least, we hope you have). Start with keeping […]
Russ
The 2021 Tax Offender of the Year December 31, 2021
It’s time once more for that (not really) most prestigious of prestigious awards, the Tax Offender of the Year. One year I’ll find that I don’t have many deserving winners (probably the year after I retire); however, there were plenty of individuals, businesses, and organizations that strove to take down the top prize. We’ll start […]
Russ
Dear IRS: What Part of Deceased Didn’t You Understand? December 16, 2021
Last year, one of our clients (call him John Smith) passed away. I had both a Power of Attorney and Tax Information Authorizations on file with the IRS for this taxpayer. One of the rules about representation is that when a taxpayer dies, the representation also ends. It is up to the estate/Executor/Administrator to obtain […]
Russ
IRS Appears to Add Requirement for Individuals to Include Statement on PPP Loan Forgiveness for 2021 Personal Returns December 6, 2021
On Friday, the IRS released draft instructions for Form 1040. Buried on page 23 of the instructions (page 24 of the PDF) is the following: Forgiveness of Paycheck Protection Program (PPP) Loans The forgiveness of a PPP Loan creates tax-exempt income, so although you don’t need to report the income from the forgiveness of your […]
Russ
The IRS Can’t Figure Out Where to Apply an Electronic Payment…Where the IRS Was Told Where to Apply It November 30, 2021
My client received a letter from the IRS dated November 22, 2021: Taxpayer identification number: [redacted] Tax Period(s): Dec. 31, 2018 Form: 1040 We received a payment of $2,002.00 on Oct. 08, 2020. We don’t have enough information to apply this payment correctly. Attach a clear copy of both sides of the canceled check or […]
Russ
IRS: Per Diem Is Food Provided by Restaurants November 16, 2021
For tax years 2021 and 2022 taxpayers are allowed to deduct 100% of business meals provided by restaurants (per § 274(n)(2)(D) of the Internal Revenue Code). One question that I had was how the per diem would be treated. Taxpayers have a choice for deducting meal expenses. They can take actual expenses or they can […]
Russ