Vadym Virchenko, EA, CAA, CTRS

I am happy to announce that I have successfully passed the Certified Tax Resolution Exam with American Society of Tax Problem Solvers (ASTPS) and become a Certified Tax Resolution Specialist (CTRS).

Tax Brief| Keeping you informed| September 2022 🎯

I. Earned Income Tax Credit
For 2022, the minimum and maximum age
limits to claim the earned income tax credit
(EIC) without any children (childless EIC)
apply once again, so you must be at least age 25
and under age 65. If you claimed the EIC on your
2021 return but don’t meet these age limits, you
won’t qualify for it on your 2022 return, so don’t
plan on it.
You also must have earned income in 2022 to
qualify for the EIC on your 2022 tax return. In
general, earned income is a requirement. However,
for 2021, taxpayers were able to elect to use their
2019 earned income to claim the EIC if it was
higher than their 2021 earned income, even if they
didn’t have any earned income in 2021. If you
already filed your 2021 tax return and think you
qualify for a larger EIC using your 2019 earned
income, contact our office. We can file an amended return for you if necessary.

II. Premium Tax Credit
In general, when you purchase health insurance
through the Marketplace, you don’t qualify for any
premium assistance if your income is too high.
However, for one more year, if your household
income is more than 400% of the federal poverty
line (FPL), you’re still eligible to claim the premium tax credit (PTC) in 2022 and will not pay
more than 8.5% of your income for coverage.

Tax Brief| Keeping you informed| August 2022 🎯

I. IRS notices

The IRS sends notices and letters for various
reasons. If you receive one, first and foremost,
don’t panic. Read it carefully. Sometimes it’s just
valuable information to keep with your tax records.
Other times, the notice might say the IRS needs
more information or changed something on your
tax return. If you agree with the change, there’s no
need to contact the IRS, but you must follow the
instructions in the notice if you have a balance due.
On the other hand, if you disagree with the change, you must respond as directed in the notice. Keep in mind, the IRS has sent out incorrect notices in the past. Contact our office so we can help determine the appropriate course of action.

It’s been difficult keeping up with all the tax law
changes in recent years. Please contact our office
if you have any questions.

IRS grants penalty relief for tax years 2019 and 2020 - August 24, 2022

www.linkedin.com

Tax Brief| Keeping you informed| August 2022🎯

Several favorable tax provisions that were enacted
in response to the COVID-19 pandemic expired at
the end of 2021. Although new legislation has been
introduced throughout 2022, nothing to date has
passed. Based on where the laws currently stand,
We’ve highlighted some key issues to help you plan
for tax year 2022. If Congress comes to some sort
of agreement and extensions are enacted, we’ll
keep you informed.

I. Paycheck checkup

It’s always a good idea to periodically check how
much federal income tax you’re having withheld
from each paycheck. This is especially important
if your filing status changes because of marriage,
divorce or the birth of a child; you or your spouse
start or stop a second job; you have taxable
income with no withholding (such as retirement
income, unemployment compensation, capital
gains or self-employment income); or you’re no
longer able to claim certain credits or expect the
amount you previously claimed to decrease by
more than $500, which could happen in 2022
since several credits return to lower amounts
with more restrictions.
You can use the IRS’s Tax Withholding Estimator
to perform a “paycheck checkup” to ensure you
have the right amount of tax withheld from
your paycheck. The online tool is available at
https://apps.irs.gov/app/tax-withholding-estimator

Got Hidden Income? The IRS May Get More Money to Find You The agency could get billions of extra dollars to go after high-earning tax cheats. Here are the areas auditors may focus on if they get more resources.

The news from the IRS. Not a good news.

Opinion | The IRS Is About to Go Beast Mode The Schumer-Manchin bill has $45.6 billion to audit the middle class.

Mistake happens. If you receive one of these, feel free to reach out.

IRS Statement on balance due notices (CP-14) | Internal Revenue Service July 27, 2022 — The IRS is aware that some payments made for 2021 tax returns have not been correctly applied to joint taxpayer accounts, and these taxpayers are receiving erroneous balance due notices (CP-14 notices) or notices showing the incorrect amount.

IP PIN: What It Is and Why You Should Get One.

Identity Protection PIN Opt-In Program can help protect taxpayers against tax-related identity theft.

The IRS Identity Protection Personal Identification Number (IP PIN) is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number (SSN) on fraudulently filed federal income tax returns. An IP PIN allows the IRS to verify a taxpayer's identity at the point of filing, thereby preventing someone else from filing a tax return using the IP PIN holder's SSN.

All taxpayers now have access to this program. Taxpayers who want an IP PIN should use the https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin tool and pass the secure access authentication process to receive a six-digit IP PIN on the spot.

An IP PIN is valid for one calendar year, and the taxpayer must obtain a new IP PIN each year. The IP PIN tool is generally unavailable from mid-November through mid-January.

What people new to the workforce need to know about income tax withholding.

For many new grads and other people entering the workforce for the first time, filling out new hire paperwork can be confusing—what’s a W-4, anyway? New employees should ensure they understand their tax situation and do some planning now, so they’re in good shape at tax time next year. It’s important to know the correct amount of tax to withhold.

~ Get tax withholding right.
Federal income tax is a pay-as-you-go tax. This means, taxpayers pay the tax as they earn or receive income during the year. Employers take out – or withhold – income tax from employee paychecks and pay it to the IRS in the taxpayer’s name.

~ Form W-4, Employee's Withholding Certificate.
New employees must complete Form W-4 so that their employer can withhold the correct amount of federal income tax from their pay.

~ Taxpayer can use the Tax Withholding Estimator.
If a taxpayer isn’t sure how much tax they should have withheld, they can use the Tax Withholding Estimator tool on IRS.gov.

~ Not all workers are employees.
Workers who are independent contractors need to pay their taxes directly since they won’t have an employer withholding money from their paycheck. Depending on how much they earn, they may need to pay estimated tax on a quarterly basis.

~ Keeping tax forms in a safe place.
Employers typically send Forms W-2 end-of-year tax documents in January. Taxpayers should be sure to hold on to all the tax documents received in the year and store them in a safe place to help ensure they can file an accurate 2022 tax return.

When the lemonade stand makes bank: young entrepreneurs and taxes.

Teens and young adults often go into business over the summer or after school. This work can include babysitting, dog walking or other part-time or temp work. When a teen or young adult is an employee of a business, their employers withholds taxes from their paycheck. However, when they are classified as an independent contractor or are self-employed, they are responsible for paying taxes themselves.

Things to keep in mind:
~ Everyone, including minors, must file a tax return if they had net earnings from self-employment of at least $400.
~ If they owe taxes, teens and young adults should file their own tax return, even if their parent or guardian claims them as a dependent.
~ Teens and young adults can prepare and sign their own tax return. There is no minimum age to sign a tax return.
~ Parents can’t claim a dependent’s earned income on their own tax return.
~ In addition to income tax, people who are self-employed are generally responsible for self-employment tax as well. It’s like the Social Security and Medicare taxes withheld from the pay of most wage earners.
~ Teens and young adults can lower the amount of tax they owe by deducting certain expenses.

Does it sound very familiar? Interested to find more what you can do as a parent and advise your young entrepreneurs and encourage entrepreneurship spirit in your children? We are here to help. Feel free to either message us or call.

New Feature on Where's My Refund?

Taxpayers may now check the status of their current tax year and two previous tax years' refunds using https://www.irs.gov/refunds. Previously, they could only check their most recently filed tax return within the past two years.

Taxpayers can start checking the status of their refund within:

- 24 hours after e-filing a tax year 2021 return
- Three or four days after e-filing a tax year 2019 or 2020 return
- Four weeks after mailing a return