Accounting Concepts Inc

Happy Thanksgiving to all our clients. Stay safe and stay healthy.Happy Thanksgiving to all our clients. Stay safe and stay healthy.

Special tax benefits for members of the military and their families Members of the military may qualify for special tax benefits. For instance, they don’t have to pay taxes on some types of income. Special rules could 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: If someone serves in a combat zone, part or all of their pay is tax-free. This also applies to people working in an area outside a combat zone when the Department of Defense certifies that area is in direct support of military operations in a combat zone. There are limits to this exclusion for commissioned officers. Other nontaxable benefits: Base allowance for housing, base allowance for subsistence and uniform allowances are among several government pay items excluded from gross income, which means they are not taxed. Moving expenses: Some non-reimbursed moving expenses may be tax deductible. To deduct these expenses, the taxpayer must be a member of the Armed Forces on active duty and their move must be due to a military order or result of a permanent change of station. Deadline extensions: Some members of the military such as those who serve overseas can postpone most tax deadlines. Those who qualify can get automatic extensions of time to file and pay their taxes. Earned income tax credit: Special rules allow military members who get nontaxable combat pay to choose to include it in their taxable income. One reason they might do this is to increase the amount of their earned income tax credit. People who qualify for this credit could owe less tax or even get a larger refund. Joint return signatures: Both spouses must normally sign a joint income tax return. However, if military service prevents that from happening, one spouse may be able to sign for the other or get a power of attorney. Service members may want to consult with their installation’s legal office to see if a power of attorney is right for them. Reserve and National Guard travel: Members of a reserve component of the Armed Forces may be able to deduct their unreimbursed travel expenses on their return. In order to do so, they must travel more than 100 miles away from home in connection with their performance of services as a member of the reserves. ROTC allowances: Some amounts paid to ROTC students in advanced training are not taxable. However, active duty ROTC pay is taxable. This includes things like pay for summer advanced camp.

All taxpayers should know the telltale signs of common tax scams Every year scammers add new twists to well-known tax-related scams and 2020 is no exception. Taxpayers should remember that the IRS generally first mails a bill to a taxpayer who owes taxes. There are special circumstances when the IRS will call or come to a home or business.... Here are some tips to help taxpayers spot scams and avoid becoming a victim. Email phishing scams The IRS does not initiate contact with taxpayers by email to request personal or financial information. For ways to avoid these scams read tips from the Department of Homeland Security. For additional tips, check out Taxes. Security. Together. Taxpayers should report IRS, Treasury or tax-related suspicious online or email phishing scams to [email protected]. They should not open any attachments, click on any links, reply to the sender or take any other actions that could put them at risk. Phone scams The IRS and its authorized private collection agencies will never: Leave pre-recorded, urgent or threatening messages. Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying, deported or revoke their licenses. Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The agency doesn’t use these methods for tax payments. Ask for checks to third parties. The agency has specific instructions on how to pay taxes. Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed. Criminals can fake or spoof caller ID numbers to appear to be anywhere in the country. Scammers can even spoof an IRS office phone number or the numbers of various local, state, federal or tribal government agencies. If a taxpayer receives an IRS or Treasury-related phone call, but doesn’t owe taxes and has no reason to think they do, they should: Hang up immediately. Contact the Treasury Inspector General for Tax Administration to report the call. Report the caller ID and callback number to the IRS by sending it to [email protected]. The subject line should include IRS Phone Scam. Report the call to the Federal Trade Commission. If a taxpayer owes tax or thinks they do, they should: View tax account information online at IRS.gov to see the actual amount owed. Review their payment options. Call the number on any billing notice they receive or call the IRS at 800-829-1040.

Taxpayers can get last minute filing tips on IRS.gov The July deadline for filing a 2019 tax return is near, but IRS tax help is available 24 hours a day on IRS.gov. Whether filing a tax return, requesting an extension or making a payment, the IRS website can help taxpayers answer most questions and avoid long waits for phone assistance. Electronic filing is the best option... Taxpayers who file electronically will likely have fewer mistakes on their tax return. Electronic filing options like IRS Free File or commercial tax software do the math, flag common errors and ask for missing information. Taxpayers with income over $69,000 who know how to complete their tax returns can use the Free File Fillable Forms. Extension to file request Taxpayers can request an extension to file until October 15. This is not an extension of time to pay. Taxpayers must estimate their tax liability on the form and pay as much as they can by July 15 to avoid possible penalties and interest. Individual tax filers, regardless of income, can use IRS Free File to electronically request an automatic tax-filing extension. To get the extension, taxpayers must estimate their tax liability on this form and should pay any amount due. Taxpayers can get an automatic extension of time to file when they pay their federal income taxes using: IRS Direct Pay The Electronic Federal Tax Payment System A credit or debit card. They should pay by the filing deadline and select extension as the reason for the payment. People can mail a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. They must complete, print and mail Form 4868 to the IRS by the July 15 filing deadline. Refund status options Taxpayers may have their refund electronically deposited into their bank or other financial account. They can check on their refund by using Where’s My Refund? on IRS.gov or download the IRS2Go mobile app and get the most up-to-date information. Mail a paper return to the right address Taxpayers should check Where to File for their state on IRS.gov so they mail it to correct address. Taxpayers who mail a tax return will experience a longer wait. Payment options Taxpayers can go to IRS.gov to pay their balance using IRS Direct Pay or another payment option. The electronic payments options are secure, and taxpayers receive immediate confirmation. The IRS has options for taxpayers who owe taxes but cannot afford to pay. Installment agreements Qualified taxpayers who cannot afford to pay their taxes in full can choose to pay their taxes over time through an installment agreement. They can use the Online Payment Agreement application to set up a payment plan. Taxpayers can also request a payment agreement by filing Form 9465, Installment Agreement Request. They should download and mail the form to the IRS along with a tax return, IRS bill or notice.

An extension to file is not an extension to pay taxes For most taxpayers the filing and payment deadline was postponed July 15. Those who need more time to file beyond the postponed date, can request an extension to file. Taxpayers must request an extension to file by July 15. This gives them until October 15 to file their tax return. An extension to file is not an extension to pay. Taxes must be paid by July 15. How to request an extension to file... To get an extension to file, taxpayers must do one of the following: File Form 4868 through their tax professional, tax software or using Free File on IRS.gov. Submit an electronic payment with Direct Pay, Electronic Federal Tax Payment System or by debit, credit card or digital wallet and select Form 4868 or extension as the payment type. An automatic extension of time to file will process when taxpayers pay all or part of their taxes electronically by the Wednesday, July 15 due date. Although the tax filing deadline has been postponed to July 15, 2020, the IRS continues processing electronic tax returns, issuing direct deposit refunds and accepting electronic payments. The agency is now is back to processing paper tax returns sent by mail. However, taxpayers who mailed a paper tax return will likely experience a longer wait time. Those who have already mailed a paper tax return but, it hasn’t yet been processed, should not file a second tax return or write the IRS to check the status of their tax return or Economic Impact Payment.

Here’s who qualifies a taxpayer for the child and dependent care credit Childcare or adult dependent care can be a major expense. Fortunately, the child and dependent care credit can provide some relief. Taxpayers who pay for daycare expenses may be eligible to claim up to 35% of what they spend; limits apply. For the purposes of this credit, the IRS defines a qualifying person as:... A taxpayer’s dependent who is under age 13 when the care is provided. A taxpayer’s spouse who is physically or mentally unable to care for themselves and lived with the taxpayer for more than half the year. Someone who’s physically or mentally unable to take care of themselves and lived with the taxpayer for six months and either: a) The qualifying person was the taxpayer’s dependent or b) They would have been the taxpayer’s dependent except for one of the following: The qualifying person received gross income of $4,200 or more The qualifying person filed a joint return The taxpayer or spouse, if filing jointly, could be claimed as a dependent on someone else’s return