This could be another rough tax season for the IRS and taxpayers. Although this year’s filing season opens January 24, 2022 (i.e., it is the first day the IRS will accept and start processing 2021 returns), the Service still has a backlog of prior year returns to process and is plagued by staff shortages due to the pandemic and reduced funding in the last few
years. Even though the majority of 2020 returns were filed electronically, many of those returns still required manual review, resulting in significant delays in IRS issuing refunds. This was the case with millions of 2020 returns of taxpayers who received unemployment compensation and had filed before Congress passed a law that retroactively exempted up to $10,200 of 2020 unemployment income per filer (that provision has not been extended to 2021). Human review was also required for a significant number of returns on which the Recovery Rebate Credit had to be reconciled with the Economic Impact Payments #1 and #2.
Over the last 3 years, the Internal Revenue Service has been engaged in a virtual currency compliance campaign to address tax noncompliance related to cryptocurrency use. The IRS’ efforts have included outreach to taxpayers through education, audits of taxpayers’ returns and even criminal investigations.
Entrepreneurs have plenty of ideas and vision, but they don’t always have the capital that’s needed to make their dreams a reality. Small and medium-sized businesses that want to grow beyond what they’re able to accomplish with their own resources often seek funding from investors who want to both support their goals and realize a profit while doing so. Funding is a process that evolves with the company itself, starting with a seed round and then moving forward. Whether you’re looking for funding or you’re a potential investor who wants the rewards that come from supporting entrepreneurs through developmental funding, you need a firm understanding of what Series A, B, and C funding are and the differences between each round. Let’s take a closer look.
January 3 – Payment of Employer Share of Social Security Tax from 2020
If you are an employer that deferred paying the employer share of social security tax or the railroad retirement tax equivalent in 2020, pay 50% of the deferred amount of the employer share of social security tax by January 3, 2022. The remaining 50% of the deferred amount of the employer share of social security tax is due by January 3, 2023. Any payments or deposits made before January 3, 2022, are first applied against the payment due by January 3, 2023.
January 3 – Time to Call For Your Tax Appointment
January is the beginning of tax season. If you have not made an appointment to have your taxes prepared, we encourage you to do so before the calendar becomes too crowded. Read more …
Most taxpayers don’t intentionally incur tax penalties, but many who are penalized are simply unaware of the penalties or the possible damage they can do to their wallets. As tax season approaches, let’s look at some of the more commonly encountered penalties and how they may be avoided.
On November 19, 2021, the House of Representatives passed their proposed version of President Biden’s Build Back Better Act, which was substantially pared down from the original version. The Senate will now take up the legislation, and without question there will be changes.
It seems hard to believe, but the holiday season is almost upon us, and that means that the 2021 tax preparation season will soon follow. With the end of the tax year just around the corner, tax-savvy individuals need to take some time from their busy schedules to review the tax benefit steps they’ve already taken and see what else they need to do. Now is the time to ensure that you’ve taken advantage of all of the tax-saving strategies available to you.
When Congress established tax-favored retirement plans, they allowed taxpayers to take a tax deduction for the amount of their allowable contribution to the plans. But they also included a requirement for a portion of the funds to be distributed each year and be subject to income tax. Such a distribution is referred to as a minimum required distribution (RMD).
While it’s usually true that the “rich get richer,” a proposed tax code will prove a remarkable exception if the House has its way. The legislation would mandate an annual required minimum distribution for retirement accounts exceeding $10 million and is aimed at accounts used as tax shelters by the rich rather than at the low-and middle-income savers who the tax-advantaged nest eggs were originally created to help.
