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Taxpayers Can Now Amend Taxes Electronically

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The Internal Revenue Service (IRS) recently announced a change in the process for amending forms and corrections filing. Here’s the latest on this change and the changes related to it. You Can Now Amend Taxes Electronically Recently, the IRS announced that you can amend taxes electronically for Forms 1040 and 1040-SR for the tax years 2019, 2020, and 2021, as well as Forms 1040-NR and 1040-PR for the tax year 2021. The IRS also shared information that a new checkbox was added to the forms listed above in order for taxpayers to indicate that a superseding return is being filed electronically. Form 1040-X is the one that allows you to amend taxes should you have a need, and you are still able to file a paper copy if you’d like. The IRS just expanded the ability to amend taxes to include electronically, too. When You Should Amend Taxes There are several instances where you should amend taxes. The following situations are all worthy of an effort to amend taxes: You noticed you’ve missed an opportunity to claim a tax deduction or credit – whether the amended refund you get will be substantially or even slightly larger is of no consequence. If the deduction or tax credit is worth it to you, you should do it – and it’s even easier now because you can amend taxes electronically. You chose the wrong tax filing status by mistake. You don’t have to keep the same status year after year, and it’s easy to get into a routine and forget to double-check this information. You have added or removed dependents in your living situation but haven’t reported that change on your tax return. You forgot to claim taxable income on your tax return. It’s easy to forget and lots of people have side hustles. Make sure yours are included, even if they aren’t a huge or majority percentage of your overall yearly earned or passive income. You mistakenly claimed an expense, deduction, or credit that you aren’t actually eligible for at this time. Math or clerical …

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7 IRS Tax Tips for Businesses in 2022

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The IRS Newsroom has a section of their website dedicated to IRS Tax Tips, and we’ve compiled the best ones from 2022 related to business taxes. Non-employee Compensation & Backup Withholding In an IRS Tax Tip from July 2022, the agency reminds businesses that if they hire independent contractors, they aren’t responsible for withholding the employer portion of income, Social Security, or Medicare taxes. But any compensation equal to or more than $600 paid to these non-employees must be reported on Form 1099-NEC. In order to file this information return, you must know the nonemployee’s TIN, which can be one of the following numbers: Social Security Number (SSN), Employer Identification Number (EIN), individual taxpayer identification, or adoption taxpayer identification. Because of this nonemployee relationship to the business, these businesses are sometimes stuck in situations where the payer (your business) is required to withhold taxes from payments known as backup withholding (the current rate is 24%). Business Taxes & Travel Deductions Another July post from the IRS tax tips page talks about the importance of knowing what business travel expenses are tax deductible. Generally, these travel expenses must be “ordinary and necessary.” For example, it would be considered tax-deductible to stay in a regular hotel room for an industry conference but booking a penthouse suite or other luxury room will not be. Travel tickets and fares – Uber, train rides, plane tickets, and the like – are deductible. Lodging, business calls, and even laundry or dry cleaning are included, and these deductions aren’t just reserved for corporate employees – self-employed individuals can take advantage as well! For a more thorough list of the deductions, check out this IRS article. And for a bonus explanation about enhanced business meal deductions, check out this article. Spear Phishing Threats Some of our favorite IRS tax tips come in the form of …

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ACA 2022: What You Need to Know

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The ninth annual ACA open enrollment period started on November 1, 2021, and it runs through January 15, 2022. This period is longer than it has been previously. Because of that, we also wanted to run through the latest changes and updates for ACA 2022. Changes to Choices and Premiums As with previous years, marketplace premiums are changing for 2022. They will be about 3% lower than 2021. 32 more insurers are participating in the marketplace next year as well, bringing the total to 213. According to KFF, consumers in the marketplace will have a choice of almost 83 health plans in 2022, up from 46 plan choices in 2021. The American Rescue Plan Act also changed the healthcare marketplace plans and premiums. ARPA, among other things, extended eligibility for premium tax credits to include people with income levels more than 400% of the federal poverty level (FPL). When broken down, consumers on these plans end up contributing a maximum of 8.5% of their income toward the benchmark silver plan. Active Renewal Is Your Best Bet If you or your employees are currently enrolled in a 2021 marketplace plan, you can let the Open Enrollment period pass and you will automatically be moved to a similar plan for 2022. But active renewal is still your best bet when it comes to ACA 2022. If you allow the marketplace to passively enroll you in a similar program to previous years, you may end up paying more in monthly premiums because the 2022 ARPA changes aren’t optimized for your ideal plan. Extremely Low-Income Enrollment For individuals with very low income levels (up to 150% FPL), a new monthly enrollment opportunity will be available. These opportunities will include zero-premium plans with greatly reduced deductibles. State-Based Marketplaces This year, three states have launched state-based marketplaces in Kentucky, Maine, and New Mexico. The Future of ACA Marketplace Enrollment Due to a special COVID-based enrollment period that ended in August of …

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2022 Tax Deadlines to Mark on Your Calendar

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The 2022 tax season is just around the corner. To help you get ready, we wanted to put together a list of the most important 2022 tax deadlines that affect you and your business. 2021 Remaining Deadlines As we look toward 2022, there are still a few deadlines and windows in the remainder of 2021. The Open Enrollment window for Marketplace Insurance tied to the Affordable Care Act runs from November 1, 2021, to January 15, 2022. If you want your insurance to take effect immediately on January 1st, you need to select your plan by December 15, 2021. Another deadline yet not past in 2021 is the deadline to maximize 401k contributions. You can still make contributions up to and including December 31, 2021. IRS Publication 509 In the draft IRS Publication 509, the Internal Revenue Service outlines some of the newest changes and reminders for the 2022 tax season. Some of those reminders include: Payment of Deferred Employer or Employee Share of Social Security Tax of 2020: If you are an employer or employee who deferred paying their share of social security or railroad retirement tax equivalent in 2020, 50% of the share is to be made by January 3, 2022, and then applied against the payment due on January 3, 2023. Useful Publications: lists are included to help you navigate the previous IRS publications that pertain to employers, farmers, individuals, and those required to pay excise taxes. W-2s and 1099-NEC There are currently no changes to the process or form make-up as it pertains to the 1099-NEC that reports non-employee compensation. The deadline for these to be sent out is January 31, 2022. Tax Year Deadlines For employers, the due date for December 2021’s social security, Medicare, and withheld income tax is January 18, 2022, if the monthly deposit rule applies. The subsequent monthly deadlines fall on the following dates in 2022: February 15, March 15, April 18, May 16, June 15, July 15, August 15, September 15, October 17, November 15, …

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Ultimate Guide to 1099s

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There are lots of different 1099s and we wanted to help you better understand them, so we’ve put together this guide of eFile360 resources to help you grow your understanding. 1099s: The Basics First thing’s first – what is a 1099? It is, at its most basic form, a tax document that is used to report miscellaneous payments made to individuals who are not employed by your business. Any non-employee who receives more than $600 from you in any given tax year should receive a 1099 from you. There are more than a dozen different types of 1099 forms, the most popular include 1099-MISC (and now 1099-NEC), 1099-INT, 1099-DIV, 1099-K, 1099-B, 1099-G, and 1099-R. For a full list of 1099s and what each one is used for, check out this blog post. Typically, the deadline for filing 1099s with the IRS and also sending them to each independent contractor recipient is January 31. Here’s a quick resource on common 1099 questions. The New Kid: 1099-NEC In tax year 2020, the 1099-NEC was brought back to take the place of Box 7 on form 1099-MISC. The 1099-NEC did not replace the 1099-MISC, it was just reinstated to help streamline the process for filing non-employee compensation. Some examples of non-employee compensation include professional service fees to accountants, attorneys, architects, contractors, engineers, and more; payments for services like parts or materials used to complete the services, director’s fees, and other payments made to freelancers and independent contractors. For more about who fills out the 1099-NEC, click here. We also put together a great list of dos and don’ts as it pertains to the form 1099-NEC. You can read it here. 1099 FAQs The IRS has a ton of great insights into frequently asked questions about 1099s, including: What's the difference between a Form W-2 and a Form 1099-MISC or Form 1099-NEC? How do you determine if a worker is an employee or an independent contractor? I received a Form 1099-NEC instead of a Form W-2. …

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How to Check Your Refund Status

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Filed your taxes but haven’t received your refund yet? Here’s how to check it. How You File Affects the Processing Time Did you file your tax returns electronically and sign up for direct deposit? Mail paper returns? These things will affect the time it takes for you to receive your refund. If you filed your returns electronically, you can start checking for a refund status using the IRS’s Where’s My Refund? tool on their website as early as 24-48 hours after you submit your files. If you are using a mobile phone to check your refund status, all you need to do is download the IRS2Go app. In order to check your refund status, you’ll need a few things on hand:  ITIN or Social Security Number Your filing status The exact amount you are expecting to receive from your refund The Where’s My Refund? tool should show a “Return Received” status within that 24-48 hour window of you filing electronically. Once the IRS finishes checking your returns, the status will change to “Refund Approved”, barring there were no issues with them. Once you receive the Approved status, you should likely receive your refund within 21 days.  Once the IRS has sent your refund to your financial institution responsible for direct depositing the money into your bank account, the status will change to “Refund Sent”. If you filed a complete return electronically, your refund should be issued in less than 3 weeks. If you filed your returns on paper and mailed them, you should expect to have your refund six to eight weeks from the date the IRS receives them. Check the Date – Especially for EITC or ACTC The IRS opened their electronic filing on February 12, and as we stated above, you should be able to check your status within a day or two. But it’s also important to note that by law, the IRS can’t issue your refund before February 15. For those who claim Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC), the earliest you can get your …

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