How to pay your medical expenses TAX FREE! Health Savings Accounts (HSA)
Start saving more on healthcare. A Health Savings Account (HSA) is an individually-owned, tax‐advantaged account that you can use to pay for current or future IRS‐qualified medical expenses. With an HSA, you’ll have the potential to build more savings for healthcare expenses or additional retirement savings through self-directed investment options¹.
How an HSA works: You can contribute to your HSA via p
Over 82 million individual taxpayers file their taxes electronically in 2021, It is 92% of all U.S. Taxpayers! Why E-filing is so popular? More Fast and less work Obviously, E-filing is a more reasonable and faster way to deliver information than mailing Paper Forms. Also, E-filing is more “greener” – you save paper, you save the gas and energy. More Accurate E-filing means the IRS does not have to re-type your tax return at their service center. In this way, the IRS will mak
If both a failure-to-file and a failure-to-pay penalty apply in the same month, the combined penalty is 5% (4.5% late filing and 0.5% late payment) for each month, or part of a month, that your return was late, up to 25%. The IRS Penalty for Late Payments The late payment or failure-to-pay penalty applies to any portion of your federal tax debt that remains outstanding as of the due date. The IRS imposes a failure-to-pay penalty of 0.5% for each month or part of a month tha
Start your own business! Starting your own business is one of the most powerful ways to take control of your life and make extra money. As the saying goes “Choose a job you love, and you’ll never have to work a day in your life.” Here are many reasons that motivate people to start their own business: You can earn more money You will have financial independence because you and only you manage your finances This is an opportunity to invest in yourself (you run the risk, but you
In case you haven’t considered it, hiring your children may be the easiest and legitimate way to cut your taxes. In this article, I am going to explore how you can begin to take advantage of the Tax Cuts and Jobs Act (TCJA) in developing a solid tax strategy for your business while cultivating the entrepreneurship culture in your children. Millennials are often regarded as the generation of entitled individuals. They arrive into the corporate world with no entrepreneurship tr
What is an Annual Report? An Annual report is necessary because it keeps the company in good standing status as a registered entity. In other words, you pay for your company’s good name. Annual reports provide names and addresses of managing members or directors to state governing authorities. Why you should keep your company in good standing? Many lenders require proof of good standing business in order to approve financing. Also, if the business wants to register in other s
If you are a business owner, no matter what business you’re in, you probably have or will have employees. In general, Payroll is payments made to employees and in this case, those payments are required to be reported to state and federal agencies, such as the IRS, Social Security Administration, Illinois Employment Security Department, and Illinois Department of Labor & Industries. Most individuals you hire are considered “employees” by law. These include: Temporary workers F
Don’t waste money on penalties! Penalties apply when you owe taxes or did not file a tax return or extension. Keep in mind that the penalties for not filing a tax return or tax extension are higher than not paying taxes owed. The late filing penalty is 5% of the additional taxes owed amount for every month your return is late. A maximum penalty is 25%. If you file more than 60 days after the DUE DATE, the minimum penalty is $435 or 100% of your unpaid tax, whichever is less.
Important! You can correct your taxes for the last three years! Story 1 Clients Alice and Erik came to our office with a recommendation from their friend. For the last couple of years, they were using another accountant. Erik was telling Alice for a while that they need to look for a second opinion and they were glad they came to our office. When we looked at their taxes, we immediately noticed that they were not signed by the accountant who prepared their taxes. It was sent
If you just received a notice that your taxes are being audited: what does it mean? A Tax Audit is an accounting procedure where the IRS examines your individual or business financial records. If you prove that your initial return was complete and correct, you won’t be asked anything further, but if the IRS finds errors or purposeful misreporting, you will have to pay the recalculated return amount and any penalties. The IRS is supposed to tell you why your return was selecte
What to do: Verify why exactly the IRS sent you a letter. The agency categorizes notices to: – information letters (the agency wants to clarify your identity; needs additional information about your tax return) – letters about changes to your tax return or/and account (these letters relate to the mistakes you made, underreporting income or/and you are being audited, and the agency lets you know about this) – letters where you owe money to the IRS (in these letters the IRS inf
You must file an amended tax return entering the corrected info and an explanation of why are you changing your report. Based on the three-year rule, you can file an amended tax return during the next three tax seasons. But it depends on what type of mistake you’ve found. For example, if the correction states that you owe more taxes, it makes sense to file the amendment ASAP. The IRS charges penalties and interest after the tax deadline. If you realize you need help to correc
Taxpayers should file their tax returns by the deadline even if they cannot pay their full tax bill. Taxpayers who owe taxes and don't file on time may be charged a failure-to-file penalty. This penalty is usually five percent of the tax owed for each month, or part of a month that the tax return is late, up to 25%. If an individual taxpayer owes taxes, but can't pay in full by April 18, 2022, deadline, they should: File their tax return or request an extension of time to fil
Get ready to launch a solo 401(k) retirement plan Most contributions and other limits for retirement plans only budged slightly for 2020. But some small business owners can take matters into their own hands. Strategy: Set up a "solo 401(k) plan." If you qualify, you can effectively benefit from both "employee" and "employer" contributions to your account. In many cases, this dual tax winner can't be beaten because it often allows you to sock away more money than any other ty
Substance over form. Have you received a W-2 or 1099 with an error? Check forms carefully to ensure accuracy. If you discover a mistake, contact the payer promptly to obtain a revised form. Also, a payer may issue a corrected form on its own. Don't ignore the change on 1040 you file with the IRS. The IRS computers match up W-2s and 1099s and could produce an unexpected tax bill. Self-insured plans. A little-known tax applies to employers with self-insured health plans—you mus
It is now mid-January and you should be receiving all of your tax forms shortly or you may already have them. If you have everything you need, don’t wait to book an appointment to finalize your taxes! The earlier you file them, the earlier you can receive your refund from the IRS. We are here to help make your tax filing as easy and stress-free as possible. Schedule an appointment with us today! We can do your taxes online in 24 hours. Click here for more details: #UnitedStat
Low-incomers needn't pay back credit overpayments. But others will have to. Families with 2021 modified adjusted gross incomes at or below $40,000 for singles, $50,000 for household heads, and $60,000 for couples needn't repay any overpayments. Those with 2021 modified AGIs of at least $80,000, $100,000, or $120,000, respectively, will need to repay the full amount of any overpayment when they file their 2021 1040s. Families with 2021 modified AGIs between the thresholds need
IRS wants more individual taxpayers to get identity-protection PINS as extra protection from tax identity theft. The IP PIN is a six-digit number assigned by IRS to help verify a taxpayer's identity on returns filed either on paper or electronically. Getting an IP PIN is entirely voluntary. Taxpayers who want one must apply for it each year. To apply, go to www.irs.gov/IPPIN, select "Get an IP PIN," and verify your identity. See IRS Publication 5367 for the complete details.
The monthly child credit payments aren't taxable. On your 2021 Form 1040, which you file next year, you'll reconcile the payments you got with your actual credit. If the child credit exceeds the payments that you received, you can claim the excess. If the credit is less than what you got, you may or may not have to repay the excess. IRS will mail a notice by Jan. 31, 2022, showing the total amount of payments made to you. Keep the letter with your tax records to help you fill
It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors. An employee is generally considered to be anyone who (a) performs services, (b) the business can control what will be done, and (c) how it will be done. What matters are that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, b