Uncategorized

Five months into the new year, spring is in the air and some days of late, it has felt like summer. Most people have filed their tax returns, and some are on extension for various reasons. No matter if you have filed taxes or are planning on it soon, here are some ways to get your tax affairs in order in case they have become out of order.

 

• First and most importantly, file those current and prior year tax returns!
• Pay your estimates on time, maybe set them up on auto pay, or break them down into monthly payments
• Don’t forget the state tax returns and estimates as well
• Get your bookkeeping under control and caught up. I personally recommend hiring a bookkeeper so you can run your business better.
• Sometimes an outsourced CFO combined with good bookkeeping can be a valuable decision since they can help you stay on track with financial decisions and benchmarks
• If you owe, pay it and if you can’t pay it in full, get a payment agreement or possible Offer in Compromise. If you have to go on a payment plan, don’t think of it as a bad thing. Think of it as the IRS wants you to get back on track and they will let you payoff you tax debt over time. It’s a loan you have to pay cheap interest on, but you don’t have to go through bank approval.

 

These are just some of the things you can do to start getting your tax affairs in order so life can be more enjoyable.

 

Up Coming Due dates:

June 15^th

• second quarter estimated tax payment due.

Sept 15^th

• partnerships and S-Corps that were put on extension are now due.
• Third quarter estimated tax payment is due.

Oct 1^st

• Estates/trusts that filed an extension are due.

Oct 15^th

• Individual tax returns (Form 1040) are due for taxpayers who filed an extension.
• C-Corporation tax return is due for C-Corporations that filed an extension.

 

DON’T FORGET:  Several years ago, we offered an IRS Transcript Monitoring Plan (TMP), and I spent this year revamping it and now I am offering it again, but much more comprehensive than in the past. With a signed Power of Attorney (POA), we can access your transcripts at the IRS and see what they see on a daily basis. The beauty of the TMP is that we will be immediately notified of any change to your IRS account, often before a notice arrives in the mail. If you have any questions about the program, feel free to reach out. This is a good program if you have current issues with the IRS or just want peace of mind

 

Ancient taxes from around the world

Taxes from England:

• Playing cards were taxed as early as the 16^th century, but in 1710, the English government dramatically raised taxes on cards and dice. This led to widespread forgeries of cards to avoid paying the tax. The tax wasn’t removed until 1960.
• In 1660, England placed a tax on fireplaces. The tax led people to brick up their fireplaces to conceal them and avoid paying the tax. It was repealed in 1689.

So, I spend all this time talking about the IRS, what about Massachusetts!!

Massachusetts DOR (MADOR) many years ago had a very old computer system and then added a second operating system so the DOR employees had to look at two systems to get answers. Then they did what a lot of businesses, gov’t agencies and people do: they CHANGED and UPGRADED their computer systems!!

In 2009 MADOR instituted the “Web file for Income” system and replaced it with the Mass Tax Connect System (MTC) in 2017. This system also allowed for lower income taxpayers to e-file their tax returns for free with more security against ID theft. MTC is designed for both individuals and businesses

Some of things you can do with MTC is pay estimated, income and meals/sales tax. There are plenty of other taxes that can be paid through MTC as well. You can also file the necessary tax returns for these taxes as well as view them at a later date. You also get a email box that you can communicate with DOR on various issues. You can get a Power of Attorney (POA) on here and apply for a payment agreement if you owe taxes.

Here are some other taxes that can be filed and paid: Cigarette, tobacco vaping excise tax, estate tax, Health Insurance responsibility disclosures (HIRD), marijuana retail sales, Paid family medical leave (PFML), income tax, sales/meals tax, room occupancy tax, payroll taxes and MORE!

Some other things you can do through MTC is grant a Power of Attorney (POA) get a certificate of good standing, file the above-mentioned returns, get an appeal, enter into an installment agreement, bulk filing and MORE!

If you haven’t done so already, signing up is easy and can save you a lot of time when living life or running your business.

DON’T FORGET: Several years ago, we offered an IRS Transcript Monitoring Plan (TMP), and I spent last year revamping it and now I am offering it again, but much more comprehensive than in the past. With a signed Power of Attorney (POA), we can access your transcripts at the IRS and see what they see on a daily basis. The beauty of the TMP is that we will be immediately notified of any change to your IRS account, often before a notice arrives in the mail. If you have any questions about the program, feel free to reach out. This is a good program if you have current issues with the IRS or just want peace of mind

Ancient taxes from around the world
Taxes from England:
• In 1696 England imposed a window tax, taxing houses based on the number of windows a house had. That led to many houses having very few windows in order to avoid paying the tax. Eventually this became a health problem and ultimately led to the taxes repeal in 1851.

• In the 1700’s England placed a tax on bricks. Builders soon realized that they could use bigger bricks (and thus fewer bricks) to pay less tax. Soon after the government caught on and placed a larger tax on bigger bricks. Brick taxes were finally repealed in 1850.

It’s the beginning of the year and the IRS is already sending out 3 types of notices.

In January, the IRS is sending taxpayers three letters, known as letters 4869C, 6419 & 6475.

• Letter 4869C is the taxpayer IP PIN (Identity Protection PIN) to be used for all e-filed returns in 2022.
• Letter 6419 identifies the Advanced Child Tax Payments that were distributed in 2021.
• Letter 6475 identifies the third stimulus amount that was distributed as the 2021 Recovery Rebate Credit.

You will get one or more of these letters depending on your situation. Reporting the correct amounts is essential to the IRS processing your 2021 tax returns so please retain the letters for your tax professional. If you have not received any letters, but some of the situations above apply to you, the IRS has put an app on its homepage so you can see what amount was distributed to you in Advance Child Tax Credits and for the 3^rd round of stimulus payments. If you put down the wrong amounts, this will delay the processing of your tax return with the IRS and it will delay your refund if you are due one.

Part of what I do is to know what the IRS letters are for and why you received one and how to deal with them. If you receive one, please don’t put it in your underwear drawer and hope that thew IRS will forget about you. They won’t. If you receive a notice, please call me so we can see how to best deal with the situation

DON’T FORGET:  Several years ago, we offered an IRS Transcript Monitoring Plan (TMP), and I spent last year revamping it and now I am offering it again, but much more comprehensive than in the past. With a signed Power of Attorney (POA), we can access your transcripts at the IRS and see what they see on a daily basis. The beauty of the TMP is that we will be immediately notified of any change to your IRS account, often before a notice arrives in the mail. If you have any questions about the program, feel free to reach out. This is a good program if you have current issues with the IRS or just want peace of mind

Ancient taxes from around the world

Taxes from England:

• Playing cards were taxed as early as the 16^th century, but in 1710, the English government dramatically raised taxes on cards and dice. This led to widespread forgeries of cards to avoid paying the tax. The tax wasn’t removed until 1960.
• In 1660, England placed a tax on fireplaces. The tax led people to brick up their fireplaces to conceal them and avoid paying the tax. It was repealed in 1689.

An informational return is a tax form a business fills out telling the IRS and state governments that a taxpayer earned a type of income and certain types of expenses/payments. Types of income can range from dividends, interest, wages, self-employed income, rental income, income from education savings programs, cancellation of debt and more…. Some of the payments can be mortgage interest and real estate taxes, payments for education, health insurance from the marketplace.

Enter in the IRS matching program: These informational returns are then sent to the IRS and state. The government can now see what types of income you were paid, and this also gives them an idea of what income they can expect to see on your return. The IRS then matches what they have on file with the information you put on your tax return. When there is a mismatch, that will generate a notice asking for a correction and/or explanation. Then the appropriate steps can be taken.

These informational returns also help reconstruct tax returns when you haven’t filed in several years and you have lost the forms for a variety of reasons. All I do is log into your account at the IRS, with a Power of Attorney (POA) and pull copies of the informational returns that were filed with the IRS.

So, when tax time comes, it is important you give all these informational returns to your tax preparer so the information can be put on your return to avoid the mismatching.

Some of the forms include but not all inclusive are the 1099 series: DIV, INT, B, C, A, MISC,

NEC (new in 2020), Form 1098 from mortgage companies, K-1’s from S-Corps, partnerships and estates

DON’T FORGET:  Several years ago, we offered an IRS Transcript Monitoring Plan (TMP), and I spent this year revamping it and now I am offering it again, but much more comprehensive than in the past. With a signed Power of Attorney (POA), we can access your transcripts at the IRS and see what they see on a daily basis. The beauty of the TMP is that we will be immediately notified of any change to your IRS account, often before a notice arrives in the mail. If you have any questions about the program, feel free to reach out. This is a good program if you have current issues with the IRS or just want peace of mind

Ancient taxes from around the world

Taxes from England:

• Playing cards were taxed as early as the 16^th century, but in 1710, the English government dramatically raised taxes on cards and dice. This led to widespread forgeries of cards to avoid paying the tax. The tax wasn’t removed until 1960.
• In 1660, England placed a tax on fireplaces. The tax led people to brick up their fireplaces to conceal them and avoid paying the tax. It was repealed in 1689.

Yes, it is the beginning of November, and the leaves are changing color and the air is getting crisper. The end of 2020 is fast approaching and that means business owners will need to start thinking of getting their bookkeeping cleaned up or STARTED!!!

Unfortunately, this is where many problems start for business owners when it comes to filing their taxes. The bookkeeping isn’t started or was started but never finished or maintained. Business owners that I know don’t want to spend the time doing the bookkeeping and never get around to dealing with it. So, there it sits in a corner, waiting to be finished and then another year comes and goes and now the 3^rd year has started. See the cycle?

So, if you see you are in this cycle of not doing your bookkeeping and it is preventing you from sleeping and filing your taxes, give me a call and I can give you some possible solutions. After you have gotten your bookkeeping cleaned up and we file all those back years, we can look at the whole picture and see what the next steps are once we are ready to file.

Some of those solutions are:

• Check for some possible penalty abatement
• Pay in full
• Installment agreement
• Partial pay installment agreement
• Offer in Compromise

FYI:  Several years ago, we offered an IRS Transcript Monitoring Plan (TMP), and I spent this year revamping it and now I am offering it again, but much more comprehensive than in the past. With a signed Power of Attorney (POA), we can access your transcripts at the IRS and see what they see on a daily basis. The beauty of the TMP is that we will be immediately notified of any change to your IRS account, often before a notice arrives in the mail. If you have any questions about the program, feel free to reach out.

Ancient taxes from around the world

• King Henry 1 allowed knights to opt out of their duties to fight in wars by paying a tax called “scutage” – essentially, a cowardice tax. At First, the tax wasn’t high, but then King John came to power and raised it to almost 300%. Some claim that the excessive tax rate was one of the things that contributed to the creation of the Magna Carta, which limited the king’s power.