Author - SFS Tax & Accounting

7 Ways To Prepare For Tax Season

Tax season 2023 is almost upon us. According to the IRS, the 2023 eFile Tax Season starts in January 2023: prepare and eFile your IRS and State 2022 Tax Return(s) by April 18, 2023. If you miss this deadline, you have until October 16, 2023. However, you should at least e-File a Tax Extension if you owe taxes by April 18, 2023. Discussing taxes is not a topic many people are overjoyed to discuss, let alone think about, especially if they have a...

Top 8 Mistakes On Tax Returns

Top 8 Mistakes On Tax Returns A typo or unintentional error can become a significant problem when you file a tax return incorrectly. Here are a few tax return mistakes preparers have found when reviewing (taxpayer prepared) tax returns. 1. Not a dependent anymore When filing a tax return, parents often claim their college-age children as dependents despite receiving little to no tax benefits. Allowing children to claim themselves as a dependent on their 1040 should be investigated as children reach their junior or...

Know Your Tax Responsibilities During Bankruptcy

You need to know your federal tax obligations during Chapter 13 Bankruptcy. Know Your Tax Responsibilities During Bankruptcy. Chapter 13 bankruptcy is only available to wage earners, the self-employed, and sole proprietor businesses. In a nutshell, bankruptcy is typically a last resort for taxpayers to get out of debt. Chapter 13 is the usual type of bankruptcy for individuals as this segment of the bankruptcy law allows individuals and small business owners in financial trouble to repay their creditors. Know your tax obligations...

Is It Really The IRS?

How to know it’s really the IRS calling or knocking on your door Many taxpayers have encountered individuals impersonating IRS officials – in person, over the telephone, and via email. Don’t get scammed. We want you to understand how and when the IRS contacts taxpayers and help you determine whether a contact you may have received is truly from an IRS employee. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are special circumstances in...

This Isn’t a Tax Change

This isn't a tax change; it's a tax reporting change. If you're a gig worker, freelancer, or self-employed American, it might be in your best interest to get a jump on your 2022's taxes and consult with us at SFS Tax & Accounting Services. That's because a new tax reporting law could affect your tax return next year. This recent ruling, a provision of the 2021 American Rescue Plan, now requires earnings over $600 paid through digital apps like PayPal, Cash App, or Venmo to...

Tips to Reconstructing Records

 Tips to Reconstructing Records. Do You Have Your Destroyed Records from the most recent disaster? The time and work recovering from a natural disaster can be extremely stressful and potentially devastate a small business. When you consider the loss of income, damage to facilities/equipment, and the loss of business records, a company can fold if the issues aren't addressed timely. Many business owners might need to reconstruct records to prove a loss. The documentation may be essential for tax purposes, federal...

Charitable Contributions and Taxes

Charitable Contributions and Taxes. If you give money or goods to a charity, you may be able to claim those as a deduction on your taxes. This will reduce the amount of your taxable income. Here are the rules for charitable contribution deductions: Your Donation Must Given be to a Qualified Charity Organizations must be eligible to receive tax-deductible charitable contributions. The IRS keeps a list of these organizations online.  You can use this list to verify that your donations are going to...

6 Tips You Can Use To Lower Your Taxes in 2021

Here are 6 Tips You Can Use To Lower Your Taxes in 2021. Leverage pre-tax savings. Take advantage of opportunities to set aside income on a pre-tax basis. Participation in your employer's retirement savings program. Fully funding Health Savings Accounts (HSA) and "Flex Benefits" accounts that allow using pre-tax earnings to pay for childcare and out-of-pocket medical costs. Remember, unlike HSAs, it is important to use up any funds in your Flex health care accounts and dependent care accounts before the...

Tax Benefits for the Military

Tax Benefits for the Military - Members of the various military service branches may qualify for tax benefits not available to civilians. For example, they don't have to pay taxes on some types of income. In addition, special rules may lower the tax they owe or allow them more time to file and pay their federal taxes. Here are some of these special tax benefits: Combat pay exclusion: Part or all their pay is tax-free if someone serves in a combat...

Is it a Business or Hobby?

Jewelry making, baking cookies, teaching yoga, freelancer, and social media manager are a few home-based businesses that have become popular over the past few years. About 50% of all small businesses in the United States are considered home-based. However, that number jumps to 60.1% when looking specifically at companies with no employees. In addition, 69% of startups begin in the home as home-based businesses. Here's how to tell the difference between a hobby and a business for tax purposes A hobby is any...