“Save X% in minutes”

We’ve all heard the quote , but what could those quick savings cost you? Speed and convenience are at the forefront of every business type in this everchanging internet age. You  can go online and order a physical product in seconds and have it at your doorstep within days. Is it always the quality you prefer? Not necessarily. But if it doesn’t workout then you can throw it away and order again.

However, there are no do-overs in insurance. You don’t get to throw it away and reorder. You get what you paid for when it comes to turning in a claim.

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Earning side income: Is it a hobby or a business?

Whether it’s something they’ve been doing for years or something they just started to make extra money, taxpayers must report income earned from hobbies in 2020 on next year’s tax return.

What the difference between a hobby and a business? A business operates to make a profit. People engage in a hobby for sport or recreation, not to make a profit.

Here are nine things taxpayers must consider when determining if an activity is a hobby or a business:

  • Whether the activity is carried out in a businesslike manner and the taxpayer maintains complete and accurate books and records.
  • Whether the time and effort the taxpayer puts into the activity show they intend to make it profitable.
  • Whether they depend on income from the activity for their livelihood.
  • Whether any losses are due to circumstances beyond the taxpayer’s control or are normal for the startup phase of their type of business.
  • Whether they change methods of operation to improve profitability.
  • Whether the taxpayer and their advisors have the knowledge needed to carry out the activity as a successful business.
  • Whether the taxpayer was successful in making a profit in similar activities in the past.
  • Whether the activity makes a profit in some years and how much profit it makes.
  • Whether the taxpayers can expect to make a future profit from the appreciation of the assets used in the activity.

The IRS has many resources to help taxpayers report their income correctly.

Every year salary.com releases their estimate value of a mother’s work based on tracking real time market prices of all the jobs that moms perform.

If stay-at-home moms earned an annual salary for all the jobs they perform on a daily basis, how much would they earn?

According to salary.com the median annual salary for stay-at-home moms in 2019 is $178,201 – rising $15,620 (a 9.6% increase) from the 2018 mother’s worth calculation.

This year’s study gave consideration to traditional roles – like housekeeper, dietitian, and day care teacher – and newer roles – like network administrator, social media communications, and recreational therapist.

Other examples positions of the Mom hybrid job role include:

  • Academic Advisor
  • Accountant
  • Art Director
  • Athletic Director
  • CEO
  • Coach
  • Dietitian
  •  Event Planner
  • Executive Housekeeper
  • Groundskeeper
  • Laundry Manager
  • Photographer
  • Public School Teacher
  • Psychologist
  • Recreational Therapist
  • Staff Nurse
  • Social Media Specialist
  • Tailor
  • Work/Life Manager

However as we all know, the work life of a mother has only increased during the last two months as our country has been dealing with the repercussions of COVID-19.

Whether it has been breaking up fights between siblings, making the same meal days in a row because they all start to blend together, or surviving E-learning along side your children (while having an internal meltdown). Moms are single-handedly keeping order where it does not belong.

We are all so blessed to have and to know these mothers.

 

This is a post directly from the IRS newsletter.

 

WASHINGTON — The Internal Revenue Service today urged taxpayers to be on the lookout for a surge of calls and email phishing attempts about the Coronavirus, or COVID-19. These contacts can lead to tax-related fraud and identity theft.

“We urge people to take extra care during this period. The IRS isn’t going to call you asking to verify or provide your financial information so you can get an economic impact payment or your refund faster,” said IRS Commissioner Chuck Rettig. “That also applies to surprise emails that appear to be coming from the IRS. Remember, don’t open them or click on attachments or links. Go to IRS.gov for the most up-to-date information.”

Taxpayers should watch not only for emails but text messages, websites and social media attempts that request money or personal information.

“History has shown that criminals take every opportunity to perpetrate a fraud on unsuspecting victims, especially when a group of people is vulnerable or in a state of need,” said IRS Criminal Investigation Chief Don Fort. “While you are waiting to hear about your economic impact payment, criminals are working hard to trick you into getting their hands on it. The IRS Criminal Investigation Division is working hard to find these scammers and shut them down, but in the meantime, we ask people to remain vigilant.”

Don’t fall prey to Coronavirus tricks; retirees among potential targets
The IRS and its Criminal Investigation Division have seen a wave of new and evolving phishing schemes against taxpayers. In most cases, the IRS will deposit economic impact payments into the direct deposit account taxpayers previously provided on tax returns. Those taxpayers who have previously filed but not provided direct deposit information to the IRS will be able to provide their banking information online to a newly designed secure portal on IRS.gov in mid-April. If the IRS does not have a taxpayer’s direct deposit information, a check will be mailed to the address on file. Taxpayers should not provide their direct deposit or other banking information for others to input on their behalf into the secure portal.

The IRS also reminds retirees who don’t normally have a requirement to file a tax return that no action on their part is needed to receive their $1,200 economic impact payment. Seniors should be especially careful during this period. The IRS reminds retirees – including recipients of Forms SSA-1099 and RRB-1099 −  that no one from the agency will be reaching out to them by phone, email, mail or in person asking for any kind of information to complete their economic impact payment, also sometimes referred to as rebates or stimulus payments. The IRS is sending these $1,200 payments automatically to retirees – no additional action or information is needed on their part to receive this.

 

The IRS reminds taxpayers that scammers may:

  • Emphasize the words “Stimulus Check” or “Stimulus Payment.” The official term is economic impact payment.
  • Ask the taxpayer to sign over their economic impact payment check to them.
  • Ask by phone, email, text or social media for verification of personal and/or banking information saying that the information is needed to receive or speed up their economic impact payment.
  • Suggest that they can get a tax refund or economic impact payment faster by working on the taxpayer’s behalf. This scam could be conducted by social media or even in person.
  • Mail the taxpayer a bogus check, perhaps in an odd amount, then tell the taxpayer to call a number or verify information online in order to cash it.

Reporting Coronavirus-related or other phishing attempts
Those who receive unsolicited emails, text messages or social media attempts to gather information that appear to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), should forward it to phishing@irs.gov.

Taxpayers are encouraged not to engage potential scammers online or on the phone. Learn more about reporting suspected scams by going to the Report Phishing and Online Scams page on IRS.gov.

Official IRS information about the COVID-19 pandemic and economic impact payments can be found on the Coronavirus Tax Relief page on IRS.gov. The page is updated quickly when new information is available.

Contrary to popular belief, not all tax returns are due on April 15th.

Image result for tax calendar

We are all accustomed to the idea of the APRIL 15th tax deadline. However, there are multiple different deadlines throughout the year based off your filing status. Whether you are an employee or an employer, you should know these deadlines in order to maximize your tax status! 

January 15, 2020: Deadline to pay the fourth quarter estimated tax payment for tax year 2019

January 31, 2020: Deadline for employers to mail out W-2 Forms to their employees and for businesses to furnish 1099 Forms reporting non-employee compensation, bank interest, dividends, and distributions from a retirement plan

February 18, 2020: Deadline for financial institutions to mail out Form 1099-B relating to sales of stock, bonds, or mutual funds through a brokerage account, Form 1099-S relating to real estate transactions; and Form 1099-MISC if the sender is reporting payments in boxes 8 or 146

February 28, 2020: Deadline for businesses to mail Forms 1099 and 1096 to the IRS

March 16, 2020: Deadline for corporate tax returns (Forms 1120, 1120-A, and 1120-S) for tax year 2019, or to request automatic six-month extension of time to file (Form 7004) for corporations that use the calendar year as their tax year, and for filing partnership tax returns (Form 1065) or to request an automatic five-month extension of time to file (Form 7004)

April 15, 2020: Deadline to file individual tax returns (Form 1040) for the year tax 2019 or to request an automatic extension (Form 4868) for an extra six months to file your return, and for payment any tax due

April 15, 2020: Last day to make a contribution to traditional IRA, Roth IRA, Health Savings Account, SEP-IRA, or solo 401(k) for the 2019 tax year

September 15, 2020: Final deadline to file corporate tax returns for the year 2019 if an extension was requested (Forms 1120, 1120-A, 1120-S)

October 15, 2020: Final extended deadline to file individual tax returns for the year 2019 (Form 1040)

 

If one of these filing dates fits you, or you fear you might have missed it, please contact us immediately to schedule an appointment

Until recently, retired owners of 401(k), traditional IRA and similar accounts had to begin taking required minimum distributions (RMDs) when they reached age 70 1/2. But the passage of the SECURE Act means:

  • You can wait until age 72 to begin taking RMDs — but only if you reach 70 1/2 after 2019. If you turn 70 1/2 before 2020, take RMDs by this April 1.
  • There are no more age restrictions on traditional IRA contributions. So you can contribute money after the age of 70 1/2.
  • Stretch IRA strategies may no longer be effective. Non-spouse beneficiaries must exhaust inherited accounts within 10 years instead of taking RMDs over their expected lifetimes.

If you are or maybe effected by this change, or even would like to consult the Performance Group, please contact us today!

 

If you have received what you think is a false communication from the IRS please contact your tax adviser immediately.

IRS Scams have become more and more common as we have come into the digital age. The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.The IRS initiates most contacts through regular mail delivered by the United States Postal Service.

However, there are special circumstances in which the IRS will call or come to a home or business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour a business as part of an audit or during criminal investigations.

If you ever feel as if you are falling victim to attempted IRS scam, contact our professionals at Performance Group and we can help legitimize the experience and advise you in the proper actions to take.

Just as each tax return is unique and individual, so is each taxpayer’s refund. There are a few things taxpayers should keep in mind if they are waiting on their refund but hear or see on social media that other taxpayers have already received theirs.

Even though the IRS issues most refunds in less than 21 days, some tax returns require additional review and take longer to process than others. This may be necessary when a return has errors, is incomplete or is affected by identity theft or fraud. The IRS will contact taxpayers by mail when more information is needed to process a return. Please contact your tax adviser if you receive correspondence directly from the IRS.

The IRS reminds taxpayers that, by law, the IRS cannot issue refunds claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. This applies to the entire refund − even the portion not associated with the EITC or ACTC. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by the first week of March, if the taxpayer chose direct deposit and there are no other issues with the tax return.

Refund information will generally be available within 24 hours after the IRS acknowledges receipt of an electronically filed return on the Where’s My Refund? ‎tool on IRS.gov and the IRS2Go phone app. These tools will be updated with projected deposit dates for most early EITC and ACTC refund filers by Feb. 22, so those filers will not see an update to their refund status date on Where’s My Refund? ‎or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates. Where’s My Refund? is the best way to check the status of a refund.

If you have questions about delayed returns, please call or contact us directly!

Each taxpayer’s situation is unique, and it is impossible to list all the items one must bring in for a tax appointment for every type of tax situation.  When in doubt, bring the item in question to your tax appointment. The following is a good general list of the items to bring in with you for your scheduled tax appointment:

Prior Year Tax Return Copies.

If you are a new client, please bring copies of your last years federal and state income tax returns.  Performance Group will review them, and we may be able to amend any mistakes/omissions.

Personal & Dependent Information

  • Social Security or ITIN Numbers with date of births for anyone who’ll be on your tax return
  • Childcare payment records with licensed provider’s ID number(s)

Income Statements

  • Bring any & all W-2, 1098, 1099 & schedule K-1 forms
  • Purchase date & total investment for any stocks or property sold
  • List of investment related expenses
  • Education scholarships or fellowships

Itemized Deductions

If you are planning on itemizing your deductions (Schedule A) please compose a spreadsheet/list summarizing them.  Itemized deductions include:

  • Mortgage interest, real estate & personal property tax records
  • Casualty & theft losses
  • Amounts of state & local income tax paid in prior years
  • Records of cash donations to religious institutions, schools & other charities
  • Records on non-cash charitable donations
  • Job search/moving expenses

Retirement & Education

  • Records of any contributions to IRAs, HSAs & other retirement plans
  • Records of tuition and other higher education expenses (books, computers, etc)

Health Care 

  • Form 1095-A if you received health insurance from an Exchange (State or Federal)
  • Marketplace exemption certificate if you applied for and received an exemption from the Exchange

Stocks & Mutual Funds

If you sold stocks or mutual funds, please provide a spreadsheet/list showing:

  • The date(s) you purchased each item(s) sold
  • Total purchase price of each item sold.  Do not assume your cost information is provided on Form 1099.

Self-Employment or Rental Property

  • Please prepare a simple 1 page income statement which summarizes your:
  • Gross self employment income for the tax year and your applicable expenses categorized and summarized by the type of expense (i.e. advertising, equipment, supplies, etc)
  • Gross rental income you received during the tax year
  • Your applicable expenses categorized and summarized by the type of expense (i.e. advertising, mortgage interest, real estate taxes, repairs, maintenance, condo fees, etc).
  • Rental start date and original cost base for all properties
  • Business Use of Home

Finally, please bring any other official tax documents you received not mentioned above. When in doubt, bring it! 

Schedule Today!

“taxes near me?”

If you type “taxes near me” into google, you get about 3,530,000,000 search results. That means you have roughly 3-ish billion options at your fingertips. But only 1 Performance Group.

Choosing the right tax professional is crucial. In a world built around price, it is important to understand what you are paying for. Are you paying for advice, a service, or peace of mind? Hopefully the answer is all three!

At the Performance Group we specialize in tax preparation for individuals, farms, and small business owners. It is our mission to help families find financial independence and that is no part time job. So our operation is open year round in order to maximize both our client experience and our level of advisement. We are a trusted local business focused on the people of our community. Let us help you!

Schedule a call today with one of our trusted advisers !

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