West Allis, WI – At the close of each tax filing season, the Internal Revenue Service (IRS) compiles a list of the most common errors taxpayers make when filing their tax returns. Believe it or not, incorrect mathematical calculations are not the number one error. The most frequent culprit for the past several years is submitting incorrect Social Security numbers on individual income tax returns.
When an incorrect return is filed, the IRS first “rejects” it then sends a notice to the taxpayer requesting additional information. This can delay a refund by several weeks, or even months. In other instances, the IRS may issue a refund to you, but for a lesser amount than what you were expecting. This may occur when a claimed dependent has a missing or incorrect Social Security number, or when another taxpayer claims the same dependent.
Another reason you may receive a reduced refund is if you are eligible to claim a tax credit for child and dependent care expenses but you do not include the Social Security number of your caregiver on your tax return. The IRS will issue your refund, less the amount of the credit. You will then have to file an amended return and wait several more weeks for the rest of your money. All this can be avoided if care is given when entering required information on your return.
Other details to keep in mind when filing your taxes this year include:
Taking a few minutes to double check your tax return before you send it to the IRS, whether we mail it or electronically file, will increase the likeliness that IRS issues your refund in a timely manner. The IRS encourages taxpayers to e-file. By e-filing your tax return, many common errors may be avoided or corrected by the computer software.
Contacting Spencer Accounting Group is the easiest way to e-file. We are the experts who keeps current on tax law changes as well as a member of the WICPA and the AICPA.
What does this mean for you?
Coronavirus Aid, Relief, and Economic Security Act (CARES) Act is the $349 billion Paycheck Protection Program.
S.3548 - CARES Act passed by the 116th Congress:
This Act is loaded with goodies for some and not so goodies for others. Spencer Accounting Group is here to support you navigate this new normal.
Here is something to consider as you donate during COVID-19.
The bill enhances tax incentives for making charitable contributions for the 2020 tax year. First, it allows an above-the-line deduction of up to $300 for charitable contributions made by individuals.
The bill also waives the 10-percent penalty on early withdrawals up to $100,000 from qualified retirement plans for coronavirus-related distributions. For purposes of the penalty waiver, a coronavirus-related distribution is one made during the 2020 calendar year, to an individual (or the spouse of an individual) diagnosed with COVID-19 with a CDC-approved test, or to an individual who experiences adverse financial consequences as a result of quarantine, business closure, layoff, or reduced hours due to the virus. Any income attributable to an early withdrawal is subject to tax over a three-year period, and taxpayers may recontribute the withdrawn amounts to a qualified retirement plan without regard to annual caps on contributions if made within three years.
The most well-publicized provision is the $1,200 recovery rebates for individual taxpayers. The rebate amounts are advance refunds of credits against 2020 taxes, and equal to $1,200 for individuals, or $2,400 for joint filers, with a $500 credit for each child. The amount of each rebate is phased out by $5 for every $100 in excess of a threshold amount. This threshold amount is based upon 2018 adjusted gross income (unless a 2019 return has already been filed), and the phaseout begins at $75,000 for single filers, $112,500 for heads of households, and $150,000 for joint filers. Thus, the rebates are completely phased out for single filers with 2018 (or 2019, if applicable) adjusted gross income over $99,000, heads of household with $136,500, and joint filers with $198,000.
In order to be eligible for a recovery rebate, the individual must not be: (1) a nonresident alien, (2) able to be claimed as a dependent on another taxpayer's return, (3) an estate or trust, and (4) must have included a Social Security number for both the taxpayer, the taxpayer's spouse, and eligible children (or an adoption taxpayer identification number, where appropriate). The bill includes additional rules for the application of the credit.
The Secretary of the Treasury is directed to provide the rebate as rapidly as possible.
Whether you have tax or financial planning questions or need advice on ways to navigate business challenges, we’re here for you. If you have any questions or concerns, please don’t hesitate to contact us here.
During this unpredictable and challenging time, it’s more important than ever to stay connected.
We’re in this together.
Here is what you will need:
This list is a continuation of our article of a Healthy Work Environment.
Student loan interest has been waived according to the Press Conference at the White House with the President. However, when I go to Navient website here is their statement:
As we find out more we will ensure we are updating you. If you have any questions contact us.
Treasury and IRS have extended the April 15, 2020 filing deadline by 90 days to July 15, 2020.
We’re waiting on IRS to release details and the specific guidance, and we will share that as soon as we see it, too.
This is great news for practitioners, and it’s a great tribute to the combined advocacy work of the WICPA, state CPA societies, AICPA and all our members!
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Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.