Business mileage rates increase 3 cents per mile in 2023.

The IRS announced 2023 mileage rates just in time to ring in the new year. This coming year, business rates increase by 3 cents per mile.?

Beginning Jan. 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022

• 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022

• 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022

These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

IRS announces delay for implementation of $600 reporting threshold.

IR-2022-226, December 23, 2022

WASHINGTON — The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season.

As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.

As part of this, the IRS released guidance today outlining that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations (TPSOs) that would have generated Form 1099-Ks for taxpayers.

"The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan," said Acting IRS Commissioner Doug O'Donnell. "To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements."

My FAMLI+ Employer is Live! Registration is now open!

My FAMLI+ Employer is the online employer services portal that Colorado businesses, third-party administrators (TPA’s) and local government employers will use to manage their FAMLI accounts. My FAMLI+ Employer will allow employers to report wage data, remit premium payments, apply for exemption with a private plan and upload letters of declination votes. Most Colorado businesses will need to register in My FAMLI+ Employer before the first premium payments are due April 30, 2023.

The portal is now open to all Colorado employers. You are invited to create your account TODAY!

Watch there how-to videos and save their step-by-step user guides to help you with My FAMLI+ Employer

Download the Employer’s Guide to FAMLI!

Everything employers need to know about FAMLI is now available in the States new Employer Guide! Use this guide as a quick reference tool covering everything from counting your employees, calculating wages, a glossary of terms, and coordinating FAMLI with other leave benefits. You can find the Employer’s Guide to FAMLI along with several other tools on our FAMLI Toolkit page.

Not too much, not too little - taxpayers should check if their tax withholding is just right.

There are good surprises and there are bad surprises. Generally, a tax-related surprise is probably unwanted. To avoid tax surprises, people should review their tax withholding. There’s still time left in 2022 to make changes and see the benefit on their tax return next year. An adjustment made now will help people avoid the surprise of a balance due or a larger-than-expected refund. People who owe taxes when they file may also face a penalty for underpayment, so they should take steps to avoid that.

It’s an especially good idea to check withholding when a taxpayer has a big life change. Events like marriage, divorce, a new child, a new home purchase, or changes in tax laws can all be reasons to adjust withholding.

Credit amounts may change each year. Taxpayers can visit IRS.gov and use the Interactive Tax Assistant to identify whether they qualify for any tax credits that may call for a withholding adjustment.

Taxes are pay as you go
Taxes are generally paid throughout the year, whether from salary withholding, quarterly estimated tax payments or a combination of both. About 70% of taxpayers, however, withhold too much every year. This typically results in a refund.

A few other facts about refunds:

·  Proper withholding adjustments help people boost their take home pay rather than overwithholding taxes throughout the year and getting it back as a tax refund.

·  While the IRS issues most refunds in 21 days or less from an error-free electronic tax return, it may take longer for different reasons.

·  It’s generally not a good idea to rely on a refund for big purchases.

·  Direct Deposit is the easiest and most convenient way to get a refund. The IRS issues more than 90% of all refunds this way.

·  Paper return processing delays stemming from the pandemic are six months or more. The IRS COVID-19 operations page offers complete details.

Tax Withholding Estimator
The Tax Withholding Estimator can help people determine if they have too much income tax withheld and how to make an adjustment. In other cases, it can help taxpayers see if they should withhold more or make an estimated tax payment to avoid a tax bill when they file their tax return next year.

Other items may affect 2022 taxes
Some unforeseen life events can make withholding adjustments necessary. They include:

·  Coronavirus tax relief — Tax help for taxpayers, businesses, tax-exempt organizations and others affected by the coronavirus.

·  Disasters, such as wildfires and hurricanes — Special tax law provisions may help taxpayers and businesses recover financially after a disaster, especially when the federal government declares their location a major disaster area.

·  Job loss – IRS Publication 4128, Tax Impact of Job Loss — Explains how this unfortunate circumstance can create new tax issues.

·  Workers moving into the gig economy due to the pandemic — People earning income in the gig economy should review their estimated tax payments to avoid a balance due or penalties when they file.

More information, click here; Tax Withholding

The Inflation Reduction Act of 2022

The Inflation Reduction Act (IRA) signed by President Biden Aug. 16 includes a variety of

tax provisions that will impact U.S. businesses and individuals. While some of the changes have

received a great deal of media attention, other may come as a surprise to those who have not

been following the legislative process closely. Generally, the changes implemented in the IRA fall into one of eight broad categories:

·         Extending the health insurance premium tax credit provisions of the American Rescue Plan Act of 2021 through 2025

·         Changing the tax credits for electricity produced from some renewable resources, the energy tax credit and certain fuels

·         Extending state and local tax (SALT) limitations

·         Adding research credit flexibility

·         Extending excess business losses (EBLs)

·         Increasing IRS appropriations by $80 billion to improve taxpayer services, increase enforcement and fund other activities

·         Establishing a 15% corporate alternative minimum tax

·         Imposing a 1% excise tax on corporate stock repurchases

Each of these provisions in the IRA are discussed in more detail in the sections that follow.

Continue reading the rest of the article below.

IRS reminds taxpayers their Social Security benefits may be taxable.

A new tax season has arrived. The IRS reminds taxpayers receiving Social Security benefits that they may have to pay federal income tax on a portion of those benefits.

Social Security benefits include monthly retirement, survivor and disability benefits. They don't include supplemental security income payments, which aren't taxable.

The portion of benefits that are taxable depends on the taxpayer's income and filing status.

To determine if their benefits are taxable, taxpayers should take half of the Social Security money they collected during the year and add it to their other income. Other income includes pensions, wages, interest, dividends and capital gains.

·  If they are single and that total comes to more than $25,000, then part of their Social Security benefits may be taxable.

·  If they are married filing jointly, they should take half of their Social Security, plus half of their spouse's Social Security, and add that to all their combined income. If that total is more than $32,000, then part of their Social Security may be taxable.

Fifty percent of a taxpayer's benefits may be taxable if they are:

·  Filing single, head of household or qualifying widow or widower with $25,000 to $34,000 income.

·  Married filing separately and lived apart from their spouse for all of 2020 with $25,000 to $34,000 income.

·  Married filing jointly with $32,000 to $44,000 income.

Up to 85% of a taxpayer's benefits may be taxable if they are:

·  Filing single, head of household or qualifying widow or widower with more than $34,000 income.

·  Married filing jointly with more than $44,000 income.

·  Married filing separately and lived apart from their spouse for all of 2021 with more than $34,000 income.

·  Married filing separately and lived with their spouse at any time during 2021.

Important considerations before filing a 2021 tax return.

Important considerations before filing a 2021 tax return.

I’ve discovered that taxpayers are always in a hurry to file their taxes because they want them out of the way and get their refund sooner rather than later.

I just received the below e-news from the IRS and one of topics; Important consideration before filing…is good article, especially regarding the Advanced Child Tax Credit Reconciliation, Recovery Rebate Credit, etc, and accessing your IRS Online Account in order to get information that you may have not received

With the 2022 tax season open, remind your clients to make sure they have everything they need before filing. The IRS series Tax Time Guide provides resources and information to help taxpayers during the filing season. https://www.irs.gov/newsroom/tax-time-guide-important-considerations-before-filing-a-2021-tax-return

An overview of the credit for other dependents

An overview of the credit for other dependents

Taxpayers with dependents who don't qualify for the child tax credit may be able to claim the credit for other dependents. This is a non-refundable credit. It can reduce or, in some cases, eliminate a tax bill but, the IRS cannot refund the taxpayer any portion of the credit that may be left over.

There is more information to help taxpayers determine if they’re eligible to claim it on their 2021 tax return.

The maximum credit amount is $500 for each dependent who meets certain conditions. These include:

·  Dependents who are age 17 or older.

·  Dependents who have individual taxpayer identification numbers.

·  Dependent parents or other qualifying relatives supported by the taxpayer.

·  Dependents living with the taxpayer who aren't related to the taxpayer.

The credit begins to phase out when the taxpayer's income is more than $200,000. This phaseout begins for married couples filing a joint tax return at $400,000.

A taxpayer can claim this credit if:

·  They claim the person as a dependent on the taxpayer's return.

·  They cannot use the dependent to claim the child tax credit or additional child tax credit.

·  The dependent is a U.S. citizen, national or resident alien.

Taxpayers can claim the credit for other dependents in addition to the child and dependent care credit and the earned income credit. They can use the IRS Interactive Tax Assistant, Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?, to help determine if they are eligible to claim the credit.

Common tax return mistakes that can cost taxpayers

Common tax return mistakes that can cost taxpayers

From the hundreds of email notices I receive from the IRS monthly, this one in particular stood out for me and I wanted to share it with my readers. I’ve included it un-edited and in its original format so that you could glean as much information as possible.

Tax laws are complicated but the most common tax return errors are surprising simple. Many mistakes can be avoided by filing electronically. Tax software does the math, flags common errors and prompts taxpayers for missing information. It can also help taxpayers claim valuable credits and deductions.

Using a reputable tax preparer – including certified public accountants, enrolled agents or other knowledgeable tax professionals – can also help avoid errors.

·  Filing too early. While taxpayers should not file late, they also should not file prematurely. People who don’t wait to file before they receive all the proper tax reporting documents risk making a mistake that may lead to a processing delay.

·  Missing or inaccurate Social Security numbers. Each SSN on a tax return should appear exactly as printed on the Social Security card.

·  Misspelled names. Likewise, a name listed on a tax return should match the name on that person's Social Security card.

·  Entering information inaccurately. Wages, dividends, bank interest, and other income received and that was reported on an information return should be entered carefully. This includes any information needed to calculated credits and deductions.  Using tax software should help prevent math errors, but individuals should always review their tax return for accuracy.

·  Incorrect filing status. Some taxpayers choose the wrong filing status. The Interactive Tax Assistant on IRS.gov can help taxpayers choose the correct status especially if more than one filing status applies. Tax software also helps prevent mistakes with filing status.  

·  Math mistakes. Math errors are some of the most common mistakes. They range from simple addition and subtraction to more complex calculations. Taxpayers should always double check their math. Better yet, tax prep software does it automatically.  

·  Figuring credits or deductions. Taxpayers can make mistakes figuring things like their earned income tax credit, child and dependent care credit, child tax credit, and recovery rebate credit. The Interactive Tax Assistant can help determine if a taxpayer is eligible for tax credits or deductions. Tax software will calculate these credits and deductions and include any required forms and schedules. Taxpayers should Double check where items appear on the final return before clicking the submit button.  

·  Incorrect bank account numbers. Taxpayers who are due a refund should choose direct deposit. This is the fastest way for a taxpayer to get their money. However, taxpayers need to make sure they use the correct routing and account numbers on their tax return.  

·  Unsigned forms. An unsigned tax return isn't valid. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have a valid power of attorney. Taxpayers can avoid this error by filing their return electronically and digitally signing it before sending it to the IRS. 

The IRS urges all taxpayers to file electronically and choose direct deposit to get their refund faster. IRS Free File offers online tax preparation, direct deposit of refunds and electronic filing, all for free. Some options are available in Spanish. Many taxpayers also qualify for free tax return preparation from IRS-certified volunteers.

For more information, contact Ann.

Starting your own business.

Starting your own business?

You have done your market research- you know your product that you want to sell and how to reach your target market-now what? Below are a few steps that you need to do:

Choosing a business structure-the legal structure you choose will impact your business registration requirements, how much you pay in taxes and your personal liability

Register your business-Make it legal and protect your brand

Get federal and state tax IDs

Apply for licenses and permits

Open a business bank account

Give me a call and I can help you get through the process of getting your business up and running on the right path!