Tax Archives - Page 6 of 13 - Wouch Maloney CPAs & Business Advisors

Second Quarter Estimated Taxes Due June 15th

June 7, 2023/in Tax /by Wouch Maloney

The year is passing quickly, and it is hard to believe that the deadline to pay second quarter estimated taxes is next week.

Who Pays Estimated Taxes?

Taxes must be paid through either withholding or estimated tax payments as income is earned. For those whose main source of income is salary or pension your withholdings may be sufficient and estimated tax payments will not be required. However, if you have significant earnings on which tax is not withheld (interest, dividends, capital gains, alimony or self-employment income) you will likely need to make estimated tax payments to avoid underpayment of estimated tax penalties.

Estimated taxes must be paid if they expect to have a tax liability of $1,000 or more when you file your return. If you are required to make estimated tax payments the due dates for 2023 tax payments are as follows:

Payment Period	Due Date*
January 1 – March 31	April 15, 2023
April 1 – May 31	June 15, 2023
June 1 – August 31	September 15, 2023
September 1 – December 31	January 16, 2024**

*Special rules apply for farmers, fisherman, certain household employees or higher-income taxpayers. To know if any special rules apply to your situation, refer to IRS Publication 505.
**January 15, 2024, is a Federal holiday, the final estimated quarterly tax payment is due the following day, January 16, 2024.

Tax Withholding Estimator

In order to avoid underpayment penalties, the IRS provides a free tool to estimate your federal income tax withholding. To use the tool, click here.

WM WISDOM:
If you change jobs and have a significant change in pay, use the Tax Withholding Estimator to make certain you are not underpaying your tax liability for the balance of the year.

Paying Your Taxes

The IRS provides many payment options. You may pay online from your bank account, debit card, credit card or digital wallet. For more information on how to make a payment online, click here.

If you prefer not to pay online, additional options to pay include same day wire, check, or money order.

Keep in mind, if you do not pay taxes “as you earn,” you will not only have a large tax bill facing you on April 15^th, but also penalties and interest for underpaying your tax throughout the year.

Questions?

Should you have questions about this topic, or any other topics related to your personal or business situation, please contac t us at any time.

DISCLAIMER: The WM Update, WM Wednesday Wisdom, WM Daily Update, and other related communications are intended to provide general information, as of the date of this communication, and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.

Processing Time for Amended Returns Up to 20 Weeks or Longer Per IRS

May 24, 2023/in Tax /by Wouch Maloney

The IRS reported that processing delays and backlogs are being cleared at a faster rate when compared to last year. While all paper and electronic individual returns received before January 2023 have been processed, certain returns have a processing time of up to 20 weeks or longer.

For those of you waiting for a response from the IRS, and wanting to know what the timeframe is for a response or action, the IRS recommends that you visit their website regarding IRS Operations: Status of Mission-Critical Functions.

Top Delays

The top service delays listed include:

processing tax returns that need to be corrected, and
answering mail from taxpayers.

Processing Time

On May 19, 2023, statistics and wait times for tax returns, payments, refunds, and correspondence were updated with some reporting a processing time of up to 20 weeks or longer. Below is a chart of the most recent updates.

Form Number	Name of Form	Unprocessed Forms	Processing Time	Updated On
Form 1040-X	Amended Individual Tax Return	1.43 million	Up to or more than 20 weeks	5/13/2023
Form 941	Employer’s Quarterly Federal Tax Return	2.1 million	Processed in the order received	5/18/2023
Form 941-X	Adjusted Employer’s Quarterly Federal Tax Return	879,000	Not processed until the related 941 is processed	5/17/2023

Other process updates provided earlier this year included Form W-7, Requests for Individual Taxpayer Identification Numbers (ITIN). The IRS reported in April 2023 that Forms W-7, are processed as they are received, and they were working on March applications in April. Be certain to promptly reply when responding to requests about your application.

Victims of Identity Theft

For anyone who submitted a Form 14039 or an Identity Theft Affidavit, Form 14039-B, expect to wait approximately 430 days to resolve your identity theft case. The increase in identity theft as well as extenuating circumstances caused by the pandemic has increased the number of cases and delays in processing. In January, the IRS began taking steps to reduce the processing time to 120 days or less.

Status Updates

To check on the processing status of your returns, you can check online.

For Form 1040-X, visit Where’s My Amended Return?

For 2022, 2021 and 2020 tax year returns, visit Where’s My Refund?

You may also track the status with the IRS2Go Mobile App available on Google Play, the App Store and Amazon.

Do Not File or Respond Twice

As always, the IRS reminds taxpayers to not file duplicate forms or respond to letters or notices more than once. The processing responses to opening mail is taking longer than usual due to resource restrictions. After a taxpayer responds to a letter or notice, there is no need to respond again. All replies are processed in the order received and your replay is recorded by the date it was received, not the date reviewed.

Questions?

Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

IRS Makes Improvements for Small Business Owners

May 17, 2023/in Tax /by Wouch Maloney

Inspired by National Small Business Week, the IRS announced how they plan to improve processes and services for small business owners.

Communicating with Small Business Owners

Improving how the IRS communicates with taxpayers has been a priority since the pandemic. For small business owners, the IRS will add new improvements to phone service, in-person service, and online services so small business taxpayers can get help when they need it.

Online Service Improvements

A goal the IRS set for the 2023 Tax Filing Season in 2024 is to launch Business Online Accounts. The Business Online Accounts tool is designed for small business taxpayers and will allow the following:

Use the account to see their tax information, schedule and track payments
Access business tax transcripts online in an easy-to-read format

Online Corrections

According to IRS Fact Sheet 2023-13, sometime before 2024, small business owners will be able to respond online, and make corrections of:

self-employment income,
employment-related identity theft notifications, and
dozens of other online notices.

To help with communications, the IRS plans to simplify the language in the notices sent to taxpayers. These notices will have clear instructions on what taxpayers need to do.

Simplification of Frequently Used Forms

The IRS plans to modernize tax forms that small businesses use most frequently. The updated forms will be streamlined, mobile-friendly and available in multiple languages. Small business owners who file their own taxes will save time with the new, simplified tax forms.

The tax forms include:

Form 940 Employer’s Annual Federal Unemployment (FUTA) Tax Return
Form 941 Employer’s QUARTERLY Federal Tax Return
Form 944 Employer’s ANNUAL Federal Tax Return

E-file Forms 1099

In February 2023, any small business entity or person could e-file Forms 1099 for tax year 2022 and later via the Information Returns Intake System (IRIS). Having the ability to e-file Form 1099 eliminates the need to copy and mail. Anyone with 250 or more information returns must file them electronically via IRIS, which is a free system that allows you to file any Form 1099 including:

Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
Form 1099-C, Cancellation of Debt
Form 1099-DIV, Dividends and Distributions
Form 1099-INT, Interest Income
Form 1099-K, Payment Card and Third-Party Network Transactions
Form 1099-LTC, Long-Term Care and Accelerated Death Benefits
Form 1099-MISC, Miscellaneous Income
Form 1099-NEC, Nonemployee Compensation
Form 1099-Q, Payments from Qualified Education Programs (Under Section 529 and 530)
Form 1099-QA, Distributions from ABLE Accounts
Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
Form 1099-S, Proceeds from Real Estate Transactions
Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA

Eliminating Paper-based Processes

Scanning of paper forms has been expanded by the IRS. Automating paper-based processes and making more forms available online is part of the strategy the IRS is using to improve processing times and getting refunds faster to taxpayers. As more digitized services are rolled out, we will be certain to apprise you of the implementation dates.

Questions?

Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

Clean Vehicle Credit Guidance Update

April 26, 2023/in Tax /by Wouch Maloney

The IRS issued updated guidance as it relates to the new clean vehicle credit. Effective April 18, the new requirements state: “if you take possession of a new clean vehicle on or after April 18, 2023, it must meet critical mineral and battery component requirements to qualify for the tax credit. This applies even if you bought the vehicle before April 18.”

Requirements to Qualify for Tax Credits

The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.

If you bought and placed in service a new qualified plug-in electric vehicle (EV) or fuel cell vehicle (FCV) on January 1, 2023 or later and meet certain income limitations, you may be eligible for a clean vehicle tax credit up to $7,500 under Internal Revenue Code Section 30D.

The maximum credit of $7,500 per vehicle consisting of $3,750 related to critical minerals and $3,750 related to battery components.

To meet the critical mineral requirement, 40% (in 2023) of the value of the critical minerals contained in the battery must be extracted or processed in the United States, a free trade agreement country, or be recycled in North America.

To meet the battery component requirement, 50% (in 2023) of the value of the battery components must be manufactured or assembled in North America. The critical mineral and battery component requirements will apply to vehicles placed in service on or after April 18, 2023.

To check if a specific make and model meets the critical mineral and battery components, visit Fuel Economy.gov.

Additional Qualifications

The credit is available to individuals and their businesses.

To qualify, you must:

Buy it for your own use, not for resale
Use it primarily in the U.S.

In addition, your modified adjusted gross income (AGI) may not exceed:

$300,000 for married couples filing jointly
$225,000 for heads of households
$150,000 for all other filers

You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in one of the two years, you can claim the credit.

The credit is nonrefundable, so you can’t get back more on the credit than you owe in taxes. You can’t apply any excess credit to future tax years.

List of Qualifying Vehicles

The IRS has compiled a list of manufacturers and vehicle models purchased in 2023 that are eligible for the New Qualified Clean Vehicles credit. To review the 2023 list, please click here. For manufacturers and models purchased in 2022 and before, click here.

Please note that some manufacturers have entered into a written agreement to become a “qualified manufacturer” but hasn’t yet submitted a list of specific makes and models that are eligible. If your vehicle model is not listed, please check back to the IRS website for updates, or to check if a specific make and model meets the critical mineral and battery components, visit Fuel Economy.gov.

Questions?

Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

DISCLAIMER: The WM Update, WM Wednesday Wisdom, WM Daily Update COVID-19, COVID-19 Business Resources, COVID-19 Client News Alerts and other related communications are intended to provide general information, including information regarding legislative COVID-19 relief measures, as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.

Tax Freedom Day 2023

April 19, 2023/in Tax /by Wouch Maloney

Sometime during the 1940s, the following question was asked “If the average worker sent his entire paycheck to the government starting on January 1st, how many days would that person need to work before they were able to keep any of their own money?”

Each year the Tax Foundation computes the answer. In 2023, yesterday, April 18th, which also was the deadline to file Federal income tax returns in the US, was the day the average worker could celebrate Tax Freedom Day.

Tax Filing Season

Our tax team worked many extended hours during the past few months as they made certain to assist clients and friends with their tax preparation, meet all deadlines or file extensions. Now that the deadline has passed, we are giving our team a well-deserved break. Our offices will be closed on Friday, April 21st to give our team a head start on the weekend. All of our offices will reopen on Monday, April 24th.

Questions?

Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

Tax Due Date Reminder

March 15, 2023/in Tax /by Wouch Maloney

As of today, there are 35 days until the April 18^th Income Tax deadline. We thought it would be a good time to remind everyone of critical dates for partnerships, S-Corps, C-Corps, and individuals for this tax season.

Partnerships & S Corporations

Date	Action
March 15, 2023	Taxes due or file an extension
September 15, 2023	Deadline to submit extended returns

C Corporations

Date	Action
April 18, 2023	Taxes due or file an extension
October 15, 2023	Deadline to submit extended returns

Individuals

Date	Action
April 18, 2023	Taxes due or file an extension
April 18, 2023	1st quarter estimated tax payment due
April 18, 2023	Deadline to make 2022 IRA or HSA contributions
October 15, 2023	Deadline to submit extended returns

Why April 18th?

Please note that since the traditional April 15^th deadline falls on a Saturday, plus the Emancipation Day holiday is being recognized on April 17^th in the District of Columbia, the national tax deadline for C-Corps and individuals was moved to April 18^th.

Questions?

Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

IRS Announces Saturday Hours

March 8, 2023/in Tax /by Wouch Maloney

The IRS will have Saturday office hours on March 11th, from 9 am to 4 pm, at specific Taxpayer Assistance Centers throughout the country. Additional Saturday hours will be held on April 8th and May 13th.

Enhancing the Taxpayer Experience

The purpose of the Saturday hours is for taxpayers to have face-to-face meetings with IRS representatives. In 2022, the IRS worked on ways to improve the client experience. The success of Saturday hours led to the continuation of Saturday hours for in-person meetings in 2023.

For your convenience, we have included information about locations open on Saturdays for Pennsylvania, Florida and New Jersey. For a complete list of offices open throughout the US, please visit the IRS website.

Saturday, March 11th:

PENNSYLVANIA:

600 Arch Street, Philadelphia, PA 19106

FLORIDA:

850 Trafalgar Court, Maitland, FL 32751
51 S.W. First Ave., Miami, FL 33130
1248 N. University Drive, Plantation/Fort Lauderdale, FL 33322
3848 W. Columbus Dr., Tampa, FL 33607

NEW JERSEY:

No New Jersey offices are listed with Saturday hours on the IRS website for March 11th.

Saturday, April 8^th:

PENNSYLVANIA

600 Arch St., Philadelphia, PA 19106

FLORIDA

4210 Metro Parkway, Ft. Myers, FL 33916
400 West Bay St., Jacksonville, FL 32202
850 Trafalgar Ct., Maitland/Orlando, FL 32751
51 S.W. First Ave., Miami, FL 33130
1248 N. University Drive, Plantation/Fort Lauderdale, FL 33322
3848 W. Columbus Dr., Tampa, FL 33607

NEW JERSEY

20 Washington Pl., Newark, NJ 07102

Saturday, May 13^th:

PENNSYLVANIA

600 Arch St., Philadelphia, PA 19106

FLORIDA

400 West Bay St., Jacksonville, FL 32202
2133 Harden Blvd., Lakeland, FL 33803
850 Trafalgar Ct., Maitland/Orlando, FL 32751
51 S.W. First Ave., Miami, FL 33130
1248 N. University Drive, Plantation/Fort Lauderdale, FL 33322

NEW JERSEY

51 Haddonfield Rd., Cherry Hill, NJ 08002

Check for updated locations and Hours

Be certain to check the IRS website for updated locations and hours before you go. For the most updated information, please visit the IRS website.

Questions?

Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

Amended E-file Rules for Partnership Returns and More

March 1, 2023/in Tax /by Wouch Maloney

Final regulations amending rules for filing returns electronically (e-file) were published by the IRS on February 23, 2023. The regulations will affect persons who are required to file:

partnership returns
corporate income tax returns
unrelated business income tax returns
withholding tax returns
certain information returns
registration statements
disclosure statements
notifications
actuarial reports
certain excise tax returns

Specifics of New Regulations

Changes made by the Taxpayer First Act (TFA) are reflected in the final regulations. The goal is to increase e-filing without undue hardship on taxpayers. Specifically, the final regulations are:

Reduce the 250-return threshold enacted in prior regulations to generally require electronic filing by filers of 10 or more returns in a calendar year. The final regulations also create several new regulations to require e-filing of certain returns and other documents not previously required to be e-filed
Require filers to aggregate almost all information return types covered by the regulation to determine whether a filer meets the 10-return threshold and is required to e-file their information returns. Earlier regulations applied the 250-return threshold separately to each type of information return covered by the regulations
Eliminate the e-filing exception for income tax returns of corporations that report total assets under $10 million at the end of their taxable year
Require partnerships with more than 100 partners to e-file information returns, and they require partnerships required to file at least 10 returns of any type during the calendar year to e-file their partnership return.

IRIS Portal

The IRS created a free online portal called the Information Returns Intake System (IRIS), to help businesses file their Form 1099s electronically. If your business sent 1099 forms on paper to the IRS, the new portal will help streamline and expedite the process.

Questions?

Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

Remote Employees: Why Their Work Location Matters

February 8, 2023/in Tax /by Wouch Maloney

Remote employees taking hush trips or workcations has been the topic of recent online articles. While the focus of the article is on what looks to be the newest travel trend for 2023, what piqued our interest was how a trip taken by a remote employee, without consent from their employer, could create tax implications for both the employer and employee.

Woman working on a laptop computer from a remote location. — *Do you know where your remote employees are working? Our team is seeing increased state nexus and tax compliance issues concerning remote work locations.*

Changing Work Locations and Tax Implications for Remote Employees

The COVID-19 pandemic dramatically changed people’s thoughts about when and where work can be performed. With many employees now working from home, companies have had to spend considerable time making sure employees tax withholdings are appropriate for their work location. Now, employees are starting to take workcations where they perform their work from a remote cabin or a beach resort. While the remote employee may believe their work location doesn’t matter as long as their work is completed, depending on the state and certain municipalities or cities, as well as how much time was spent working in the new location, your employee may face an additional tax burden.

WM WISDOM:
Make certain your company has rules in place regarding remote employees notifying you in advance of changes to their remote work location.

Employer Tax Implications

Generally, a company is deemed to be doing business in and possibly subject to a state’s tax laws if the company has employees in that state. Historically, a company’s office locations were where the majority of employees worked and where company’s had state tax nexus. Today employers need to determine the impact their remote workers have on where they are deemed to be doing business. Whether an employee is working from their home or working while on a workcation they could be creating nexus and possibly unknowingly creating an additional tax filing requirement for their employer.

Our team is seeing increased state nexus and tax compliance issues concerning remote work locations. All employers should take steps to create policies and guidelines for their employees so that they are aware of work locations and have the ability to determine the impact on their business.

Questions?

Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

2023 Tax Filing Season Begins

January 25, 2023/in Tax /by Wouch Maloney

The IRS declared Monday, January 23^rd as the official start to the 2023 tax filing season. This date is when the agency began accepting and processing 2022 tax year returns. In preparation for tax filing season, the IRS is continuously providing tips and details regarding what information you need to file, how to file, changes to tax credits, when to expect refunds and what they have implemented to improve taxpayer service.

Information You Need Before Filing

Organize and gather 2022 tax records including any of the below information that may pertain to your situation:

Identification Numbers including:

Social Security number
Individual Taxpayer Identification Numbers
Adoption Taxpayer Identification Numbers
Identity Protection Personal Identification Number (IP PIN) for 2023 (Keep in mind that your IP PIN is valid only for federal income tax returns and changes annually)
Direct deposit information

Income

If you have multiple sources of income, be certain that you have all documents before filing, including a W-2 if you are an employee and Form1099 from banks or other payers reporting items including but not limited to:

Unemployment compensation
Dividends
Interest
Social Security benefits
Retirement / pension plan distributions
Income earned from the gig economy
Digital assets

How to File

To speed refunds, the IRS urges taxpayers to file electronically with direct deposit information.

Free File

The IRS has various programs to help file electronically such as Free File, for taxpayers who made $73,000 or less in 2022.

VITA and TCE Programs

Other free services include the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. The free tax help is for people who make $60,000 or less, a person with disabilities and limited English-speaking taxpayers. For more information about these programs or to find a VITA or TCE site near you, please click here.

Military Tax Services

For those in the military community, MilTax is a free resource offered through the Department of Defense that includes tax preparation and electronic filing software, personalized support from tax consulting and current information about filing taxes. This service includes specific items such as deployments, combat and training pay, housing and rentals and multi-state filings. To learn more visit, click here.

IRS Online Tools and Resources

For a list with links to online tools and resources offered by the IRS, please click here.

Tax Credits

Changes to Tax Credits include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Child and Dependent Care Credit. Details can be found in our January 11^th WM Wednesday Wisdom. For more details, please click here.

Where’s My Refund?

According to the IRS, most refunds are issued in less than 21 days.

For taxpayers claiming the EITC or Additional Child Tax Credit (ACTC) before mid-February, the law requires the IRS to hold the entire refund, not just the portion associated with EITC or ACTC.

You can use the Where’s My Refund tool to check the status of your refund.

Improving the Taxpayer Experience

In October 2022, the IRS reported hiring 4,000 new customer service representatives, to help answer phones and provide other services.

“As the newly hired employees are trained and move online in 2023, we will have more assistors on the phone than any time in recent history,” said IRS Commissioner Chuck Rettig.

In addition to improving phone assistance, the IRS is also hiring IT and compliance positions to help improve and serve taxpayers.

Deadlines

The deadline to file or request an extension for filing 2022 returns is Tuesday, April 18, 2023. The date was changed to the 18^th since April 15^th falls on a weekend plus Washington D.C. is closed for the Emancipation Day holiday on April 17^th.

Dates to keep in mind for 2023

Date	Purpose
Monday, January 23, 2023	Tax filing season begins; IRS starts to accept and process individual 2022 tax returns.
Tuesday, April 18, 2023	National due date to file a 2022 tax return or request an extension and pay tax owed.
Monday, October 16. 2023	Due date to file for those who requested an extension on their 2022 tax return.

Questions?

Should you have questions about year-end payroll processing, or any other topics related to your personal or business situation, please contact us at any time.

Who Pays Estimated Taxes?

Tax Withholding Estimator

Paying Your Taxes

Questions?

Top Delays

Processing Time

Victims of Identity Theft

Status Updates

Do Not File or Respond Twice

Questions?

Communicating with Small Business Owners

Online Service Improvements

Online Corrections

Simplification of Frequently Used Forms

E-file Forms 1099

Eliminating Paper-based Processes

Questions?

Tax Filing Season

Questions?

Partnerships & S Corporations

C Corporations

Individuals

Why April 18th?

Questions?

Enhancing the Taxpayer Experience

Saturday, March 11th:

Saturday, April 8th:

Saturday, May 13th:

Check for updated locations and Hours

Questions?

Changing Work Locations and Tax Implications for Remote Employees

Employer Tax Implications

Questions?

Information You Need Before Filing

How to File

IRS Online Tools and Resources

Tax Credits

Where’s My Refund?

Improving the Taxpayer Experience

Deadlines

Questions?

WM Newsletter

Contact Us

Headquarters

Philadelphia Office

Florida Office

Services

Industries

Saturday, April 8^th:

Saturday, May 13^th: