TaxMamas TaxQuips

You thought we were all done with deadlines on the 15^th? Yet, here are some more for you to consider. And some great classes coming up.

 

 

 

 

 

 

Dear Family,

Let’s get the upcoming deadlines out of the way, then we can get to more interesting information about how to learn more about dealing with tax issues.

October 31 – FBAR – The foreign bank account filing deadline  for folks in general. December 31^st for folks in Presidentially-declared disaster areas. You can file the FinCEN 114 form online at no charge. (There are no taxes related to this.) The penalty for not filing each year starts at $10,000. Oh, you think this doesn’t apply to you? Oh Yeah? Do you have family outside the U.S.? Do you sign jointly on your parents’ bank accounts in case anything happens to them? Did they open an account for your child and have been funding it in the child’s name? Lots of traps and pitfalls that could generate a penalty, even if you’re innocently ignorant.

October 31 – All the 3^rd quarter payroll and sales tax returns are due for the IRS and your states, if you’re an employer. It’s in your best interest to try to file these reports and make your payments electronically. The IRS still hasn’t quite cleared up all their mountain of unopened mail.

November 10^th –  National EIP Registration Day, with a big publicity push to get non-filers registered before the final deadline on November 21^st. Folks who don’t normally file tax returns, but want those Economic Impact Payments, it’s time to get into the system. Just so you know, the IRS has been actively trying to locate people who are chronically homeless or in shelters to try to get the funds to them. If you know someone who qualifies and isn’t in the system, please help them register. And if they don’t have bank accounts, help them get a prepaid debit/credit card to receive their payments. (No, don’t rip them off.) Note: This is for people who don’t normally have a filing obligation due to very low income – AND they are not someone’s dependent. No games, please.

Online Education Opportunities with TaxMama^®

 

Nov 4-6 – the ASTPS Tax Representation Super Conference – with IRS Commissioner Chuck Rettig as Keynote Speaker
TaxMama^® is teaching two classes on the first day. One of them is – How YOU Can Fix the IRS.

Nov 10 – Marijuana’s Tax Paradox (or the Uncanny Cannabis Controversy) at CCH CPE Link. Basic tax information for Cannabis businesses that may not deduct expenses on IRS returns.

Nov 24 – Tax Breaks Tips and Updates Part 1
Nov 25 -  Tax Breaks Tips and Updates Part 2
Covering updates and changes in tax laws during 2020 and getting ready for the 2021 tax return filing season. Includes some information on last minute planning recommendations. This isn’t just for tax professionals – people handling your own filings will find this interesting and useful, too.

On demand  – Lambers Tax Resolution Series – 10 courses to help you get liens and levies released, penalties and interest waived or released, and succeed with IRS audits, and learn how to present an Offer in Compromise that the IRS will accept.

 

 

 

From the IRS

Videos from the 2020 IRS Nationwide Tax Forums (actually, earlier years are available- just scroll down) You can audit them at no charge. Or pay a small fee to get the education credits if you need them. Lots of interesting selections – many taught by IRS personnel

Keep an eye on these links – the IRS is adding topics every month -no charge and potential CPE or CE credits.

IRS webinars for Professionals – https://www.irs.gov/businesses/small-businesses-self-employed/webinars-for-tax-practitioners

The next one is Sale of Partnership Interest - November 19, 2020

IRS webinars for Small Businesses – https://www.irs.gov/businesses/small-businesses-self-employed/webinars-for-small-businesses
There are some for North Carolina businesses – and the link to the Partnership webinar above.

IRS Webinars for Exempt Organizations and Governmental Entities – in case you are involved with a non-profit, there’s lots of guidance here.
https://www.irs.gov/government-entities/webinars-for-tax-exempt-government-entities

You’re never too old to learn! And since you’re generally stuck at home anyway – why not improve your skills?!

And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion

To make comments please drop into the TaxQuips Forum.

 

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Here it is again, the end – the final filing deadline for 2020 – for most people. TaxMama® wants to give you some last-minute tips.

 

 

 

 

Dear Family,

It’s October again. The filing deadline for individuals (1040) and C corporations (1120) that got extensions in April must file by Friday, October 15th. (You do realize that your partnerships, S corps and 1041s were due last month, right?)

Well, first of all, the good news – in the face of bad news. Those people in the various disaster zones still have more time to file – and pay a variety of taxes. (This includes personal, business and payroll forms and taxes that are due.)

This year, the President did declare the California wildfires as disaster zones. So if you’re affected, your new deadline is extended to Dec. 15. (Note: none of the wildfires in 2019 were declared by the President at all – and so none of the 2019 damage is deductible on the IRS return – but is deductible on the California return.) https://www.irs.gov/newsroom/around-the-nation-california

Victims of Hurricane Sally have until January 15, 2021 to file tax returns and make payments.  https://www.irs.gov/newsroom/irs-announces-tax-relief-for-hurricane-sally-victims

Here is the main IRS disaster page, with links to each state. See if your area is affected – and any special deadlines that might apply –  https://www.irs.gov/newsroom/around-the-nation

Moving on from natural disasters to financial and personal disasters

What about if you’re still trying to prepare your tax return and you don’t have any of the natural disaster excuses, perhaps you have COVID19 excuses because you’re not getting data you need. And/or you are frustrated and annoyed due to missing information and new tax law confusion?

If your problem is based on COVID19 missing information, it’s quite possible that if you wait until you get all the information, and then file your tax return, that the IRS (and state) will waive your penalties. But why go through the process of begging for penalty relief?

Here’s a better idea. (Always a great solution!)

FILE!

Even if you’re missing information, don’t understand Sec 199A, or other parts of the Tax Cuts and Jobs Act. Do the best you can to estimate, project, or compute the missing or confusing information as best you can. If you’re really not sure about the numbers – tell the IRS. And tell them why. Include a Form 8275 disclosure statement and identify each line in the tax return that you estimated. Include a worksheet, spreadsheet or explanation for each item – and explain why you had to estimate the amounts. Do the best you can with this. Remember, you always have three years to amend the tax return once you get better information.

The benefit of doing this? The main benefit is to avoid the 25% late filing penalty that will kick in almost immediately after October 15^th. You won’t have to try to correspond with the IRS, or sit on hold for hours, to try to get the penalties waived. The other benefit is, you get it done and reduce your stress. You now have time to get help to fix any shortcomings in your return.

Some business owners (especially those with no employees) still have time to reduce their balance due by opening and funding a SEP-IRA until October 15^th, if you don’t already have one open (or fund your solo-401(k) if it’s already open by December 31, 2019.) Be SURE your financial institution sets it up properly and on time. Be absolutely certain to get the funds in and designated as 2019 contributions if you want to claim the deduction on your 2019 tax return. (Of course, if you have employees, make sure they are covered and funded as well – so this strategy may not be as easy for employers.)

If you have a balance due, try to pay it in full. Though your interest on that balance is only about 3% – 4% per year, the late payment penalty is ½ % per month. That runs from April 15^th.

Remember to make your estimated tax payments for 2020 – they were due by September 15^th – but if you pay a little late, the penalties are minor.

And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion

To make comments please drop into the TaxQuips Forum.

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Today TaxMama^®  wants to talk to you about your missing payments to the IRS.

 

 

 

 

 

 

Dear Family,

Feeling frustrated about getting your tax questions, answered, issues resolved and trying to understand where your stimulus checks have gone?

Yeah. The bad news is – this is going to go on for a very long time.

The worse news is – you’re going to get IRS notices about balances due on your IRS tax liability if you send in your payments by mail, instead of paying them online. Why? The IRS is still working their way through the mounds and towers and truck-loads of mail – and may not have gotten to your check yet.

Tip – for future reference, try to ALWAYS make all IRS and state tax payments electronically. They will get recorded on time.

 

In the meantime – we have asked the IRS to see if they can turn off that automated notice in their computer system. After all, we all know that those penalties and assessments will be forgiven. But in the meantime, either you or your tax professional will have to write to the IRS to request that the penalties be forgiven. (Which letters the IRS won’t find for more months.) OR your tax pro has to invest time in trying to reach someone at the IRS – and your fees for this service might be more than your penalties.

Then the IRS will have to invest time and staff resources to respond – and a needless cycle will just play out – wasting everyone’s time, resources and funds. So our Stakeholder Liaison team has asked that the IRS just set the computer system not to send out ANY of those letters until at least October – by which time, hopefully, they will have processed all those letters and payments.

Of course, you can always switch and make those payments electronically – and stop payment on the paper checks! (Sure, that will generate more correspondence in the end for the bounced check fees – but you can easily clear that up by showing your proof of payment – later, when they are receiving paper again.)

You can use these resources to pay online – https://www.irs.gov/payments

The Direct Pay system comes straight from your bank account – with no fees.
https://www.irs.gov/payments/direct-pay

The debit or credit card version comes with fees -
https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card

(So instead of the debit card – use the Direct Pay option.)

Oh, by the way, businesses that have been sending in payments by mail?
Some of your letters have been returned, without even being opened. The IRS has closed certain lockboxes (contracts with some banks have expired). https://www.irs.gov/filing/closing-of-business-po-box-addresses-could-affect-your-clients

SAVE THOSE RETURNED envelopes! You will need those as proof that you tried to pay on time to avoid late payment penalties. 

Instead, pay electronically – using the public payments link or QUICKLY set up the business payment system you should have had in the first place – at https://www.eftps.gov/eftps/ (IRS’ Electronic Federal Tax Payment System).

And remember, you can find answers to all kinds of questions about taxes and business issues, and Enrolled Agent tax education, free. Where? Where else? At www.TaxMama.com .

To make comments please drop into the TaxQuips Forum.

Incidentally, I don’t know if you know - TaxMama.com® is a free resource for people to get answers to tax questions BEFORE they make major, costly moves.

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Reminder – Some Helpful IRS Links

Which IRS services are open and available – keep an eye on this link

https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue

IRS Electronic Options

https://www.irs.gov/newsroom/irsgov-helps-taxpayers-get-tax-information-they-need-find-tools-for-filing-paying-checking-accounts-and-answering-questions

IRS Online Assistance Available

https://www.irs.gov/newsroom/irs-urges-taxpayers-to-use-electronic-options-outlines-online-assistance

Dealing with audit or collections issues – IRS is keeping this page up to date

https://www.irs.gov/newsroom/irs-unveils-new-people-first-initiative-covid-19-effort-temporarily-adjusts-suspends-key-compliance-program

Of course, all the filing and paying deadlines – including taxpayers overseas whose June 15th filing deadline has been pushed back to July 15th.

https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers?

And a great chart: How to Use the Tools on IRS.gov to Get Your Economic Impact Payment  https://www.irs.gov/newsroom/how-to-use-the-tools-on-irsgov-to-get-your-economic-impact-payment

There are lots more things going on – watch the information in the IRS Newsroom –  https://www.irs.gov/newsroom  and TaxMama.com  

 

 

 

 

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Today TaxMama^®  wants to give you some tax updates and tips now that the long-delayed first filing deadline for 2020 has arrived.

 

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Dear Family,

Today may be a bit of a frantic day for those of us working through the last-minute filing requirements for July 15^th. We were given a gift of 3 extra months to get our files in order.

Hopefully, people who were not working, or were working for fewer hours, you took advantage of that time to get your financial and tax lives in order. Either you have already filed – or today’s the day. Remember, if you are still not ready – you do have options – EXTENSIONS. (get details here)

If you owe money and cannot pay, consider putting your tax return on extension for three reasons:

• You delay the IRS’ collections actions
• You avoid the 5% non-filing penalty by getting an extension, instead of just avoiding filing because you owe the money.
• You get three extra months to try to find a way to either raise the money or reduce your taxes (legally).

Incidentally, I just finished the materials for a class on Estimated Tax Payments and Paying Payroll Taxes for CCH CPE Link that will be live on July 28^th.
And ways for business owners to still reduce their 2019 taxes legally – in the July 21^st class on Owners’ Fringe Benefits – in case either of these will help you after you file your extensions.

 

Alert for you from the IRS:

Due to COVID19, the IRS had put collections actions on hold until July 15^th.  But they are re-starting ALL collections activity.

• If you have a direct pay installment agreement it will automatically make payments on due after July 15^th – otherwise, send in your payment
  
  • If you still cannot afford to pay, due to unemployment, hardship, etc. you can revise it online – https://www.irs.gov/payments/online-payment-agreement-application or call the number on your notice
  
  
  
  
• Pending Offer in Compromise (OIC) – if it was in process and your periodic payments were suspended until July 15^th – start making them again, to keep your OIC in effect while the IRS continues to review your application
• Accepted OICs – if payments were not made recently – you MUST catch them up by July 15^th – or call the number on your notice if you are unable to pay.
• Private Debt Collection – The IRS did not send any new cases to them – but will start again on July 16^th .
• Taxpayers who owe but cannot pay – set up an online installment agreement or try to call the IRS to get yourself put in Currently Not Collectible Status – better yet, file an extension to get more time before they start collections activity.

 

Advice for you from the Taxpayer Advocate, Erin M. Collins

The value of superseding a return – important – must be done by July 15^th to be of any use
https://taxpayeradvocate.irs.gov/news/NTA_Blog_The_Value_of_a_Superseding_Tax_Return

A warning about relying on IRS information – and protecting the rights of taxpayers who rely on that information  -  please, please read this.

https://taxpayeradvocate.irs.gov/news/nta-blog-protecting-taxpayer-rights-FAQ

 

And remember, you can find answers to all kinds of questions about taxes and business issues, and Enrolled Agent tax education, free. Where? Where else? At www.TaxMama.com .

 

Reminder – Some Helpful IRS Links

Which IRS services are open and available – keep an eye on this link

https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue

IRS Electronic Options

https://www.irs.gov/newsroom/irsgov-helps-taxpayers-get-tax-information-they-need-find-tools-for-filing-paying-checking-accounts-and-answering-questions

IRS Online Assistance Available

https://www.irs.gov/newsroom/irs-urges-taxpayers-to-use-electronic-options-outlines-online-assistance

Dealing with audit or collections issues – IRS is keeping this page up to date

https://www.irs.gov/newsroom/irs-unveils-new-people-first-initiative-covid-19-effort-temporarily-adjusts-suspends-key-compliance-program

Of course, all the filing and paying deadlines – including taxpayers overseas whose June 15th filing deadline has been pushed back to July 15th.

https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers?

And a great chart: How to Use the Tools on IRS.gov to Get Your Economic Impact Payment  https://www.irs.gov/newsroom/how-to-use-the-tools-on-irsgov-to-get-your-economic-impact-payment

There are lots more things going on – watch the information in the IRS Newsroom –  https://www.irs.gov/newsroom  and TaxMama.com  

 

And remember, you can find answers to all kinds of questions about taxes and business issues, and Enrolled Agent tax education, free. Where? Where else? At www.TaxMama.com .

 

Incidentally, I don’t know if you know - TaxMama.com® is a free resource for people to get answers to tax questions BEFORE they make major, costly moves.

To make comments please drop into the TaxQuips Forum.

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Today TaxMama^®  wants to provide some tips before the upcoming July 15^th filing deadline.

 

 

 

 

 

 

 

 

Dear Family,

I hope you’re able to enjoy (what we used to call) a “safe and sane” 4^th of July holiday. When arriving in Los Angeles many decades ago, we used to have colorful booths all over town, selling fireworks, using that slogan. With high levels of fire danger around here, those booths are gone, and fireworks are not welcome in Los Angeles anymore. (Though I am sure we are seeing them around our neighborhood lately.)

Moving on to other topics – another round of COVID19 loans will probably be approved. Please understand the distinction between the PPP loans that you get through your bank, and the EIDL loans that you get directly from the SBA.

The EIDLs are real loans that must be paid back. These loans do not include a forgiveness provision. And if you accept a loan over $25,000, the SBA will file a lien against your business, including all intangible assets. The terms include a variety of significant restrictions and conditions – so READ your loan agreement carefully before signing.

The PPP Loans are the ones with the forgiveness provision. And the SBA does not file a lien against the business.

The upcoming July 15^th filing deadline

Getting an extension of time to file your tax returns does not give you an extension of time to pay the taxes that are due. You still have to pay a variety of taxes that were deferred and are rapidly coming due:

• 2019 IRS balance due and the state
• 2019 IRA, Roth IRA and HSA or MSA contributions
• 2020 1^st quarter estimated tax payments
• 2020 2^nd quarter estimated tax payments

That can add up to a LOT of money, if you have been taking advantage of the extra time and not paying any of those balances – or if you have been unemployed and don’t have the funds.

If you still cannot come up with enough money to cover it all – what should you prioritize?

The 2019 IRA, Roth IRA and HSA or MSA contributions – there is no extension for those – so the only way you can get those deductions is to fund these accounts by July 15^th.

What about all those 2019 balances that are due?

Here is a form hardly anyone knows about! Form 1127 – for additional time to PAY taxes without incurring penalties.  You can use it in hardship situations – and this year certainly qualifies!   https://www.irs.gov/forms-pubs/about-form-1127

In the meantime, you can get additional time to file your 2019 personal, corporate and certain trust returns.

For both the 1040 series (Individual Income Tax Return) and the Form 709 (Gift and Generation Skipping Tax Return) – file Form 4868 by July 15^th .

For pretty much all other eligible entities, file Form 7004 by July 15^th .

Note: Extensions for calendar year partnerships and S Corporations should have been filed by March 15^th .

I am sure you have a lot of questions

This is a tough year – and we are going to help you. We = Andy at Pronto Tax and the team at Lambers.   My friends and I have set aside two hours on Wednesday, July 8^th – a whole week before the filing deadline – to answer your questions. So please, join us. It’s free.  http://iTaxMama.com/SpecialRoundTableWebinar

Watch out of another deadline – 2016!

If you still haven’t gotten around to filing that year’s tax return – you were given 3 extra months to get that year filed – before you lose your entire refund. Instead of April 15^th – you were given until July 15, 2020 to file your 2016 tax return and claim your refund.

The IRS says that $1.5 BILLION is sitting there unclaimed.

What are you waiting for? If you still can’t get the specific numbers you need in order to file – use reasonable estimates and explain how you arrived at those numbers. Don’t wait.

File IMMEDIATELY! That will protect your refund. You will then have up to 3 years to amend and provide documentation. And if you do need that documentation – get to work right now to get it, to preserve your share of that $1.5 BILLION worth of unclaimed tax withholdings and estimated taxes.

You can prepare the returns electronically using  this service http://iTaxMama.com/FreeTaxUSA .  But, filing these returns won’t be easy.   You will  have to file them on paper. And you know the IRS isn’t processing paper returns right now. So, you will have to PROVE that you filed before the deadline.

How? Send your tax return in, properly addressed, using CERTIFIED MAIL with proof of mailing. If possible, get proof of delivery. And guard that receipt carefully. Put it in a safe place. Because it’s going to take the IRS many months before they even get to open your envelope. To preserve your right to your refund, you will probably be called upon to prove that you mailed that tax return in by July 15^th. So don’t slack off on this, please.

 

Reminder – Some Helpful IRS Links

Which IRS services are open and available – keep an eye on this link

https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue

IRS Electronic Options

https://www.irs.gov/newsroom/irsgov-helps-taxpayers-get-tax-information-they-need-find-tools-for-filing-paying-checking-accounts-and-answering-questions

IRS Online Assistance Available

https://www.irs.gov/newsroom/irs-urges-taxpayers-to-use-electronic-options-outlines-online-assistance

Dealing with audit or collections issues – IRS is keeping this page up to date

https://www.irs.gov/newsroom/irs-unveils-new-people-first-initiative-covid-19-effort-temporarily-adjusts-suspends-key-compliance-program

Of course, all the filing and paying deadlines – including taxpayers overseas whose June 15th filing deadline has been pushed back to July 15th.

https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers?

And a great chart: How to Use the Tools on IRS.gov to Get Your Economic Impact Payment  https://www.irs.gov/newsroom/how-to-use-the-tools-on-irsgov-to-get-your-economic-impact-payment

There are lots more things going on – watch the information in the IRS Newsroom –  https://www.irs.gov/newsroom  and TaxMama.com

And remember, you can find answers to all kinds of questions about taxes and business issues, and Enrolled Agent tax education, free. Where? Where else? At www.TaxMama.com .

Incidentally, I don’t know if you know - TaxMama.com® is a free resource for people to get answers to tax questions BEFORE they make major, costly moves.

To make comments please drop into the TaxQuips Forum.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

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