October 15 is the 6-month Extension Deadline

With the exception of those eligible for tax deadline relief due to a federally declared disaster, everyone who requested a 6-month extension to file a 2023 tax return must file by October 15.

If you owe tax, remember that the automatic 6-month extension applies only to filing your return, not to paying tax. Generally, after the standard April filing deadline, unpaid tax balances begin accumulating interest charges that increase daily. Filing and paying as soon as possible will keep those charges to a minimum.

People who cannot pay their full tax balance now should still file as soon as possible. By proactively setting up a payment plan with the IRS, they can minimize late payment penalties.

Disaster Relief Eligibility: www.irs.gov/newsroom/tax-relief-in-disaster-situations ... See MoreSee Less

Disaster Preparedness – Did You Know?

September is National Preparedness Month, the perfect time for all Americans to check their readiness for storms, floods, fires and other disasters. To help with that checkup, the IRS recently reminded taxpayers of important steps to include in their disaster preparation plans.

- Store key documents in a secure, waterproof and fireproof container. These documents include birth certificates and/or Certificates of Naturalization, Social Security cards, tax returns, home deeds and vehicle titles. If you do not have a suitable storage option in your home, you may wish to rent a safe deposit box. In either case, make copies of these documents and store the copies in a separate location from the originals, such as at a relative's home. You may also wish to scan documents if you have access to a secure digital storage option.

- To facilitate making insurance claims and/or claiming disaster loss tax deductions, individuals and businesses should maintain accurate inventories of their valuables. One simple way to document your possessions is to regularly take photos or videos around your home. Store the photos or videos securely, and include written notes like the year, make and model of key items.

Recovering from a disaster is always challenging. However, the right preparation can make the process a little simpler, and less stressful. ... See MoreSee Less

Many Americans May Qualify for Higher Education Tax Credits – Did You Know? (2/2)

If you pay higher education expenses like college or trade school tuition for yourself, your spouse or your dependent, then you may qualify for a tax credit in 2024.

The Lifetime Learning Credit (LLC) is available for an eligible student in your household at any stage of postsecondary education, including taking one or more courses to improve job skills. If you meet the eligibility requirements, which include income limits, you may claim a credit of up to $2,000 for tuition and school fees. Unlike the American Opportunity Tax Credit (AOTC), the LLC is nonrefundable, so if your credit amount exceeds the tax you owe, you cannot receive the excess credit as a refund.

To claim either the LLC or AOTC, you must obtain Form 1098-T (Tuition Statement) from a qualifying educational institution. A tax professional can help you determine whether you qualify for higher education tax benefits, and if so, help you claim them on your tax return next spring. ... See MoreSee Less

Many Americans May Qualify for Higher Education Tax Credits – Did You Know? (1/2)

If you pay higher education expenses like college or trade school tuition for yourself, your spouse or your dependent, then you may qualify for a tax credit in 2024.

The American Opportunity Tax Credit (AOTC) is available for students who are pursuing a degree or similar credential, and have not completed four years of postsecondary education. If you meet the eligibility requirements, which include income limits, you may claim a credit of up to $2,500 per eligible student in your household for tuition and school fees. The credit is partially refundable, so if your credit amount exceeds the tax you owe, you could receive up to 40% of the excess credit as an IRS refund.

In order to claim the credit, you must obtain Form 1098-T (Tuition Statement) from an eligible education institution. A tax professional can help you determine whether you qualify for the AOTC or other benefits for higher education costs, and if so, help you claim them next spring. ... See MoreSee Less

Late Summer Tax Checkup – Did You Know?

Every year, millions of Americans face the disappointment of an unexpectedly large tax bill in the spring. Often, those bills occur because people did not adequately plan for the tax impacts of their activities the previous summer. A late summer or early fall tax checkup can help you stay up to date with your payments, protecting you from disheartening April surprises.

Here are some key questions to consider when reviewing your tax situation:
- Did you take on a seasonal or part-time job for the summer?
- Did you earn summer income as a gig worker, freelancer or independent contractor?
- Did you receive other income not subject to tax withholding, such as interest or dividends?
- Did you sell valuable assets like antiques, cryptocurrency, artwork, jewelry, collectibles, stocks or musical instruments at a gain?
- Did your tax filing status change (for example, because you got married)?

Any of these circumstances could result in your regular paycheck withholding being insufficient to cover your tax obligations. You can use the IRS Withholding Estimator tool (link below) to check whether your payments are staying on track. If not, you may need to submit a new Form W-4 to your employer to request extra withholding, or make quarterly estimated tax payments. A tax professional can help you analyze your tax circumstances now, so you can make the right moves to bring about a favorable outcome later.

IRS Withholding Estimator: www.irs.gov/individuals/tax-withholding-estimator ... See MoreSee Less

Summer Day Camp Expenses May Be Eligible for a Tax Credit – Did You Know?

Parents who paid for their children under the age of 13 to attend summer day camps may qualify to claim the Child and Dependent Care Credit on their 2024 tax returns. This credit provides assistance for parents who pay care expenses for a qualifying child so that they can work or seek work. You may also be able to claim the credit for day camp or other care costs for a dependent age 13 or older with a permanent disability. Note that expenses associated with sending children to overnight summer camps generally do NOT qualify for this credit.

To qualify for the Child and Dependent Care Credit, you must have earned income, and your adjusted gross income (AGI) must not exceed limits set by the IRS. Typically, the credit covers 20-35% of qualifying day camp or other childcare expenses, up to a maximum of $3,000 for one child or $6,000 for two or more children. Your exact credit amount may depend on factors such as your spouse's income and whether you received any reimbursement for childcare costs from a state agency or other source.

When claiming the Child and Dependent Care Credit, you generally must provide the name and taxpayer identification number (TIN) of the day camp or care provider on your tax return. In most cases, married taxpayers must file a joint return in order to get the credit, although exceptions exist for cases where spouses live apart. A tax professional can help you determine whether your summer day camp or other childcare expenses qualify for this valuable credit, and if so, help you maximize your credit amount. ... See MoreSee Less

Bogus "Self Employment Tax Credit" – Did You Know?

Scammers have been spreading misinformation through ads and social media posts about a supposed Self Employment Tax Credit, which they claim people can use to get massive IRS refunds. In reality, no such credit even exists. The scammers charge fees to prepare tax returns, on which they actually file bogus claims for the specialized Credit for Sick and Family Leave, which was only available for 2020 and 2021.

In reality, only a small number of self-employed people who experienced very specific COVID-related circumstances qualify for the Credit for Sick and Family Leave. IRS personnel flag suspicious credit claims for investigation. In the end, people who get lured in by these scammers have to repay their tax refunds, with penalties and interest charges added. Meanwhile, the scammers disappear with the fees they collect to file false tax returns.

Remember, if a tax credit or tax refund claim sounds too good to be true, it usually is. A trusted tax professional can help you determine whether you missed any legitimate credits on your past tax returns, and if so, help you file amended returns to claim your refunds. ... See MoreSee Less

Teachers: Make Sure to Save Receipts for Classroom Supplies to Get a Tax Benefit

If you are a teacher gearing up for the new school year, you may be able to reduce your tax bill by keeping records of your expenses. Classroom teachers and certain other school employees may qualify to deduct the cost of classroom supplies on their tax returns. The Educator Expense Deduction is an "above the line" deduction, which means that you may claim it even if you do not itemize deductions on your return.

Eligible teachers and classroom staff may deduct up to $300 in classroom expenses (up to $600 for joint filers who are both educators) for tax year 2024. Qualifying expenses may include the cost of typical school supplies like books, paper, writing utensils and rulers, along with athletic supplies for courses in health or physical education. You may also be able to deduct unreimbursed costs to participate in professional development workshops or courses.

You must maintain complete records of all deductible expenses, such as itemized receipts or invoices. A tax professional can help you determine whether you qualify for the Educator Expense Deduction, and if so, help you claim it on your tax return next spring. ... See MoreSee Less

Checking Eligibility Before Transferring Clean Vehicle Credit to a Dealer – Did You Know?

For the first time in 2024, people who purchase or lease vehicles that qualify for the Clean Vehicle Credit (CVC) may transfer the credit to a registered seller (usually a dealership). The transferred credit may be used as a down payment, or exchanged for a reduction in the vehicle price. However, you may only claim and transfer a CVC if you meet the eligibility requirements.

Most importantly, for at least one the years 2023 and 2024, your adjusted gross income (AGI) must not exceed the limit for your filing status. The current AGI limits are $300,000 for joint filers, $225,000 for head of household filers and $150,000 for all other filing statuses. In addition, you must use any vehicle you purchase using a transferred CVC predominantly for personal (not business) purposes.

People who transfer a CVC to a vehicle dealer in 2024 must report the credit amount and verify their credit eligibility on their 2024 tax returns. Those with AGIs above the limit will need to repay the credit and may face added IRS penalties. Note that an invalid CVC must be repaid directly to the IRS by the person who claimed and transferred the credit, not by the vehicle dealer. A tax professional can help you determine whether you qualify for the CVC, and if so, whether transferring your credit to a dealer makes sense for you. ... See MoreSee Less