Category: INDIVIDUALS

May 6th, 2021 by Oscar

Para la mayoría de los contribuyentes individuales, la fecha límite de presentación y pago de impuestos se aplazó para el 17 de mayo (en Texas, 15 de junio). Aquellos que necesitan más tiempo para presentar, pueden solicitar una prórroga para presentar. Los contribuyentes deben solicitar una prórroga para presentar antes del 17 de mayo, o pueden enfrentar una multa por falta de presentación. Esta prórroga les da hasta el 15 de octubre para presentar su declaración de impuestos. Una prórroga de tiempo para presentar no es una prórroga para pagar. Los impuestos deben pagarse no más tardar del 17 de mayo para evitar multas e intereses sobre el monto adeudado después de esa fecha.

Para obtener una prórroga para presentar, el IRS insta a los contribuyentes a tomar una de las siguientes acciones:

  1. Presentar el Formulario 4868 (SP) a través de su profesional de impuestos, software de impuestos
  2. Enviar un pago electrónico con Pago directo, el Sistema de pago electrónico de impuestos federales o con tarjeta de débito o crédito, o con billetera digital y seleccionar el Formulario 4868 o prórroga como tipo de pago.

Una prórroga automática de tiempo para presentar se procesará cuando los contribuyentes paguen la totalidad o parte de sus impuestos electrónicamente antes de la fecha de vencimiento del lunes, 17 de mayo. Algunos contribuyentes pueden tener más tiempo para presentar sus declaraciones de impuestos y pagar los impuestos adeudados

Posted in INDIVIDUALS, NEWS

April 29th, 2021 by Oscar

Anyone can request an automatic tax-filing extension, but some people get extra time without asking, according to the Internal Revenue Service.

Due to the ongoing pandemic, this year the IRS postponed the usual April 15 deadline for filing individual income tax returns until May 17, 2021. Even so, as is the case every year, many Americans will still need more time to meet their tax-filing obligation.

The IRS estimates that more than 16 million taxpayers will get an automatic extension this filing season, either by filing a form or making an electronic tax payment. But some taxpayers, including disaster victims, those serving in a combat zone and Americans living abroad get more time, even if they don’t ask for it. Here are details on each of these special tax-relief provisions.

Disaster victims

Victims of the February winter storms in Texas, Oklahoma and Louisiana have until June 15, 2021, to file their 2020 returns and pay any tax due.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in a federally declared disaster area when at least one area qualifies for FEMA’s Individual Assistance program. Ordinarily, this means that taxpayers need not contact the IRS to get disaster tax relief.

This relief also includes more time for making 2020 contributions to IRAs and other plans and making 2021 estimated tax payments. In some cases, relief is also available to people living outside the disaster area if, for example, they have a business located in the disaster area, have tax records located in the disaster area or are assisting in disaster relief.

Taxpayers outside the United States

U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico have until June 15, 2021 to file their 2020 tax returns and pay any tax due.

The special June 15 deadline also applies to members of the military on duty outside the U.S. and Puerto Rico who do not qualify for the longer combat zone extension. Affected taxpayers should attach a statement to their return explaining which of these situations apply.

Everyone else

Taxpayers who don’t qualify for any of these three special situations can still get more time to file by submitting a request for an automatic extension. This will extend their filing deadline until Oct. 15, 2021. But because this is only a tax-filing extension, their 2020 tax payments are still due by May 17.

Another option is to pay electronically and get a tax-filing extension. The IRS will automatically process an extension when a taxpayer selects Form 4868 and makes a full or partial federal tax payment by the May 17 due date using Direct Pay, the Electronic Federal Tax Payment System EFTPS or a debit or credit card. Under this option, there is no need to file a separate Form 4868. Please note, you must register for EFTPS before using. 

Posted in INDIVIDUALS, NONPROFIT ORGANIZATIONS, SMALL BUSINESSES

April 22nd, 2021 by Oscar

Taxpayers need to know their correct filing status and be familiar with each option. A taxpayer’s filing status typically depends on whether they are single or married on Dec. 31, which determines their filing status for that entire year.

More than one filing status may apply in certain situations. If this is the case, taxpayers can usually choose the filing status that allows them to owe the least amount of tax.

When preparing and filing a tax return, the filing status affects if the taxpayer is required to file a federal tax return; if they should file a return to receive a refund; their standard deduction amount; if they can claim credits and the amount of tax they should pay.

Here are the five filing statuses:

  • Single. Normally, this status is for taxpayers who are unmarried, divorced or legally separated under a divorce or separate maintenance decree governed by state law.
  • Married filing jointly. If a taxpayer is married, they can file a joint tax return with their spouse. When a spouse passes away, the widowed spouse can usually file a joint return for that year.
  • Married filing separately. Married couples can choose to file separate tax returns. When doing so, it may result in less tax owed than filing a joint tax return.
  • Head of household. Unmarried taxpayers may be able to file using this status, but special rules apply. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person living in the home for half the year.
  • Qualifying widow or widower with dependent child. This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child. Other conditions also apply.

Posted in INDIVIDUALS, NEWS

April 15th, 2021 by Oscar

The May 17 (June 15 in Texas) deadline for individuals to file and pay their federal income tax is fast approaching. While paying taxes is not optional, people do have options when it comes to how they pay taxes. The IRS offers a variety of ways to pay taxes.

Some taxpayers must make quarterly estimated tax payments throughout the year. This includes sole proprietors, partners, and S corporation shareholders who expect to owe $1,000 or more when they file. Individuals who participate in the gig economy might also have to make estimated payments. The deadline to pay estimated taxes remains April 15, 2021.

Here are five ways for people who need to pay their taxes. They can:

  • Pay when they e-file using their bank account, at no charge, using electronic funds withdrawal.
  • Use IRS Direct Pay which allows taxpayers to pay electronically directly from their checking or savings account for free. They can choose to receive email notifications about their payments when they pay this way. Taxpayers should watch out for email schemes. IRS Direct Pay sends emails only to users who request the service.
  • Pay using a payment processor by credit card, debit card or digital wallet options. Taxpayers can make these payments online, by phone or through the IRS2Go app.
  • Make a cash payment at more than 60,000 participating retail locations nationwide. To pay with cash, visit IRS.gov and follow the instructions.
  • Pay over time by applying for an online payment agreement. Once the IRS accepts an agreement, the taxpayers can make their payment in monthly installments.

Posted in INDIVIDUALS, NEWS

April 8th, 2021 by Oscar

Following the extension of the filing and payment deadline for individuals to May 17, 2021, the IRS announced other tax deadline extensions to the same date.

Here’s what’s affected:

Contributions to IRAs and health savings accounts

People now automatically have until May 17, 2021, to make 2020 contributions to their Individual retirement arrangements; health savings accounts; Archer medical savings accounts and Coverdell education savings accounts.

The deadline for reporting and paying the 10% additional tax on amounts included in gross income from 2020 distributions from IRAs or workplace-based retirement plans is now May 17, 2021. Lastly, the due date for Form 5498 series returns related to these accounts is now June 30, 2021,

2017 unclaimed refunds The law provides a three-year window to claim a refund. Normally, April 15, 2021, is the deadline to claim a refund from tax year 2017 but, the IRS has extended it to May 17, 2021. To get the unclaimed refund, a taxpayer must properly address and mail the tax return, postmarked by May 17, 2021. If a taxpayer doesn’t file a return within three years, the money becomes property of the U.S. Treasury.

Foreign trusts and estates

Foreign trusts and estates with federal income tax filing or payment obligations, who file Form 1040-NR, now have until May 17, 2021.

2021 Annual Filing Season Program application deadline

Tax return preparers who’d like to participate in the Annual Filing Season Program for calendar year 2021 now have until May 17, 2021, to file their application with the IRS.

No extension for estimated tax payments

April 15, 2021 is still the deadline to make first quarter estimated tax payments. Withholding is automatic for most employees, but some taxpayers’ income isn’t subject to income tax withholding. These taxpayers must generally make quarterly estimated tax payments. Income that may require estimated tax payments includes: self-employment; interest; dividends; alimony and rentals.

Posted in INDIVIDUALS

April 1st, 2021 by Oscar

Para ayudar a los contribuyentes, el Servicio de Impuestos Internos anunció hoy que tomará medidas para reembolsar dinero automáticamente esta primavera y verano a las personas que presentaron su declaración de impuestos informando la compensación por desempleo antes de los cambios recientes realizados por el Plan de Rescate Estadounidense.

La legislación, firmada el 11 de marzo, permite a los contribuyentes que ganaron menos de $150,000 en ingresos brutos ajustados modificados excluir la compensación por desempleo hasta $20,400 si son casados ​​que presentan una declaración conjunta y $10,200 para todos los demás contribuyentes elegibles. La legislación excluye solo los beneficios por desempleo de 2020 de los impuestos.

Debido a que el cambio ocurrió después de que algunas personas presentaron sus impuestos, el IRS tomará medidas en la primavera y el verano para realizar el cambio apropiado en su declaración, lo que puede resultar en un reembolso. Se espera que los primeros reembolsos se realicen en mayo y continuarán hasta el verano.

Para aquellos contribuyentes que ya presentaron y calcularon su impuesto según la cantidad total de compensación por desempleo, el IRS determinará la cantidad tributable correcta de compensación por desempleo e impuestos. Cualquier sobrepago de impuestos resultante será reembolsado o aplicado a otros impuestos pendientes adeudados.

Para aquellos que ya han presentado, el IRS hará estos nuevos cálculos en dos fases, comenzando con los contribuyentes elegibles para la exclusión de hasta $10,200. Luego, el IRS ajustará las declaraciones de los contribuyentes casados ​​que presentan una declaración conjunta y que son elegibles para la exclusión de hasta $20,400 y otros con declaraciones más complejas.

No es necesario que los contribuyentes presenten una declaración enmendada a menos que los cálculos hagan que el contribuyente sea nuevamente elegible para créditos y deducciones federales adicionales que no estén incluidos en la declaración de impuestos original.

Por ejemplo, el IRS puede ajustar las declaraciones de aquellos que reclamaron el Crédito Tributario por Ingreso del Trabajo (EITC) y, debido a que la exclusión cambió el nivel de ingresos, ahora pueden ser elegibles para un aumento en el monto del EITC que puede resultar en un reembolso mayor. Sin embargo, los contribuyentes tendrían que presentar una declaración enmendada si originalmente no reclamaron el EITC u otros créditos, pero ahora son elegibles porque la exclusión cambió sus ingresos. Es posible que estos contribuyentes también deseen revisar sus declaraciones estatales.

Posted in INDIVIDUALS

February 25th, 2021 by Oscar

Deductions reduce the amount of taxable income when filing a federal income tax return. In other words, they can reduce the amount of tax someone owes.
Most taxpayers have a choice of either taking the standard deduction or itemizing their deductions. The standard deduction may be quicker and easier, but, itemizing deductions may lower taxes more, in some situations. It’s important for all taxpayers to look into which deduction method best fits them.

New this year
Following tax law changes, cash donations of up to $300 made by December 31, 2020 are deductible without having to itemize when people file a 2020 tax return.

Here are some details about the two methods to help people decide deduction to take:

Standard deduction
The standard deduction is an amount that reduces taxable income. The amount adjusts every year and can vary by filing status. The standard deduction amount depends on the taxpayer’s filing status, whether they are 65 or older or blind, and whether another taxpayer can claim them as a dependent. Taxpayers who are age 65 or older on the last day of the year and don’t itemize deductions are entitled to a higher standard deduction.

Taxpayers benefit from the standard deduction if their standard deduction is more than the total of their allowable itemized deductions.

Itemized deductions
Taxpayers may itemize deductions because that amount is higher than their standard deduction, which will result in less tax owed or a larger refund. In some cases, they not allowed to use the standard deduction.

A taxpayer may benefit by itemizing deductions if any of following apply to their tax situation, they:

  1. Had large uninsured medical and dental expenses
  2. Paid interest and taxes on their home
  3. Had large uninsured casualty or theft losses
  4. Made large contributions to qualified charities

Individual itemized deductions may be limited. Schedule A, Form 1040, Itemized Deductions can help determine what limitations may apply.

Posted in INDIVIDUALS, NEWS

February 18th, 2021 by Oscar

In 2020, many people joined the gig economy to help make ends meet during the pandemic. Whether it’s a side business or a primary source of income, all taxpayers need to understand how their gig work affects their taxes. The bottom line is taxpayers must report gig economy income on their tax return.

Here’s a quick overview of the gig economy:

The gig economy is also referred to as the on-demand, sharing or access economy. People involved in the gig economy earn income as a freelancer, independent worker or employee. They use technology known as online platforms to connect them with customers to provide goods or services. This includes things like renting out a home or spare bedroom and providing delivery services.

Here are some things taxpayers should know about the gig economy and taxes:

• Money earned through this work is usually taxable.
• There are tax implications for both the company providing the platform and the individual performing the services.
• This income is usually taxable even if the:

– Taxpayer providing the service doesn’t receive an information return, like a Form 1099-NEC, Form 1099-MISC, Form 1099-K, or Form W-2.
– Activity is only part-time or side work.
– Taxpayer is paid in cash.

• People working in the gig economy are generally required to pay:

– Income taxes.
– Federal Insurance Contribution Act or Self-Employment Contribution Act tax.
– Additional Medicare taxes.

• Independent contractors may be able to deduct business expenses. These taxpayers should double check the rules around deducting expenses related to use of things like their car or house. They should remember to keep records of their business expenses.
• Special rules usually apply to rental property also used as a residence during the tax year. Taxpayers should remember that rental income is generally fully taxable.
• Workers who do not have taxes withheld from their pay have two ways to pay their taxes in advance. Here are these two options:

– Gig economy workers who have another job where their employer withholds taxes from their paycheck can fill out and submit a new Form W-4. The employee does this to request that the other employer withholds additional taxes from their paycheck. This additional withholding can help cover the taxes owed from their gig economy work.
– The gig economy worker can make quarterly estimated tax payments. They do this to pay their taxes and any self-employment taxes owed throughout the year.

Posted in INDIVIDUALS, NEWS

February 11th, 2021 by Oscar

A medida que los contribuyentes se preparan para presentar su declaración de impuestos de 2020, deben comenzar por recopilar sus archivos. Los contribuyentes deben recopilar todos los documentos de ingresos de fin de año para ayudar a garantizar que presenten una declaración de 2020 completa y precisa y evitar demoras con los reembolsos.

Los contribuyentes deben tener disponibles todos los archivos necesarios, como W-2, 1099, recibos, cheques cancelados y otros documentos que respalden cualquier ingreso, deducción o crédito en su declaración de impuestos.

La mayoría de los contribuyentes deben haber recibido documentos de ingresos que incluyan:

  1. Formulario W-2, Declaración de salarios e impuestos
  2. Formulario 1099-MISC, Ingresos misceláneos
  3. Formulario 1099-INT, Ingresos por intereses
  4. Formulario 1099-NEC, Compensación para no empleados
  5. Formulario 1099-G, Ciertos pagos del gobierno; como compensación por desempleo o declaración de impuestos estatales
  6. Formulario 1095-A, Declaraciones del Mercado de Seguro de Salud

Cuenta en línea

Los contribuyentes pueden ver su cuenta en línea. Esto les permite ver la información más reciente de su cuenta de impuestos federales y la declaración de impuestos más reciente a través de una herramienta en
IRS.gov segura y conveniente. Esto puede ayudar a los contribuyentes si necesitan información de la declaración del año pasado.

Aquellos con una cuenta en IRS.gov también pueden ver los montos de sus pagos de impacto económico. Esto será útil para las personas elegibles que no recibieron ningún pago o recibieron menos de los pagos completos. Pueden reclamar el crédito de reembolso por recuperación en su declaración de impuestos federales de 2020.

Las personas pueden visitar Acceso Seguro: Cómo inscribirse para usar ciertas herramientas electrónicas de autoayuda en línea para obtener más información acerca de cómo crear una cuenta o cómo restablecer el nombre de usuario o la contraseña.

Posted in INDIVIDUALS

February 4th, 2021 by Oscar


The IRS will begin accepting and processing 2020 tax year returns on Friday, Feb.12, 2021.

The quickest way for taxpayers to get a tax refund is by filing electronically and choosing direct deposit for their refund.

Most earned income tax credit or advanced child tax credit related refunds should be available in taxpayer bank accounts or on debit cards by the first week of March, if they choose direct deposit and there are no other issues with their tax return.

By law, the IRS cannot issue refunds before mid-February for tax returns that claim the earned income tax credit or ACTC. The IRS must hold the entire refund — even the portion not associated with EITC or ACTC. This helps ensure taxpayers receive the refund they deserve and gives the agency more time to detect and prevent errors and fraud.

To make filing easier, taxpayers should:

  1. File electronically and use direct deposit for the quickest refunds.
  2. Check IRS.gov for the latest tax information. There is no need to call the IRS.

Those who may have been eligible for stimulus payments should carefully review their eligibility for the recovery rebate credit. Most people received Economic Impact Payments automatically and those who received the maximum amount don’t need to include any information about their payments when they file.

They received the full amounts of both Economic Impact Payments if:

  • Their first Economic Impact Payment was $1,200 for individuals; $2,400 married filing jointly for 2020, plus $500 for each qualifying child born in 2020.
  • Their second Economic Impact Payment was $600 for individuals; $1,200 married filing jointly for 2020, plus $600 for each qualifying child born in 2020.

People who didn’t receive the payments or only received partial payments may be eligible to claim the recovery rebate credit when they file their 2020 tax return, even if they are normally not required to file a tax return. Tax preparation software, including IRS Free File, will help taxpayers figure the amount.

Taxpayers should remember that stimulus payments they received are not taxable, and don’t reduce the amount of their refund.

Important filing season dates

Friday, Feb. 12. IRS begins 2021 tax season. Individual tax returns start being accepted, and processing begins.
Thursday, April 15. Due date for filing 2020 tax returns or requesting extension of time to file.
Thursday, April 15. Due date for paying 2020 tax owed to avoid owing interest and penalties.
Friday, Oct. 15. Due date to file for those requesting an extension on their 2020 tax returns.

Posted in INDIVIDUALS, NEWS