In late August 2023, tax professionals and experts from all corners of the country gathered under the warm Florida sun for the highly anticipated IRS Tax Forum Conference. Among the attendees, Loeffler Financial Group stood out as a shining example of excellence in the world of tax and finance. The event, hosted at the Orlando County Convention Center, provided an invaluable opportunity for Loeffler Financial Group to network, learn, and share insights on the ever-evolving world of taxation.
The Gathering of Tax Minds
The IRS Tax Forum Conference is an annual event that brings together tax practitioners, tax professionals, and representatives from the IRS to discuss important topics, new developments, and best practices in the field of taxation. With the goal of enhancing the expertise of tax professionals and fostering collaboration among attendees, this conference has become a cornerstone in the industry.
Loeffler Financial Group Stays Up-to-Date on Tax Laws and Regulations
Loeffler Financial Group, a respected name in the financial world, was a prominent participant at this year’s conference. As a testament to their commitment to excellence, the group sent a delegation of their top experts to engage in workshops, panel discussions, and networking opportunities. Their active participation in various sessions demonstrated their dedication to staying at the forefront of tax law and regulation changes.
Key Highlights:
- Workshops and Educational Sessions: Loeffler Financial Group’s team immersed themselves in a wide range of workshops and educational sessions that covered topics such as tax planning, compliance, cybersecurity, and emerging tax technologies. This investment in knowledge will undoubtedly benefit their clients in the coming year.
- Networking Opportunities: The conference provided ample opportunities for professionals to connect and share insights. Loeffler Financial Group leveraged these connections to foster collaboration and expand their network of industry peers.
- Panel Participation: Several members of Loeffler Financial Group had the honor of participating in panel discussions. Their expertise and thought leadership were on full display as they shared their insights on complex tax issues and future trends.
- Exhibitor Presence: The Loeffler Financial Group booth in the exhibition hall attracted a steady stream of conference attendees. Visitors had the chance to engage with their experts, learn more about their services, and gain valuable insights into their approach to financial and tax planning.
Key Takeaways:
The IRS Tax Forum Conference in Orlando, Florida, was a tremendous success for Loeffler Financial Group. Their active involvement, dedication to staying current on industry developments, and commitment to excellence solidify their position as a trusted and forward-thinking financial partner for their clients.
As the tax landscape continues to evolve, Loeffler Financial Group’s presence at events like the IRS Tax Forum Conference demonstrates its unwavering commitment to providing top-tier financial and tax services. Their participation in such forums not only benefits their clients but also contributes to the overall advancement of the tax profession.
Loeffler Financial Group’s attendance at the IRS Tax Forum Conference in Orlando, Florida, was a testament to their ongoing commitment to excellence and their dedication to serving their clients with the highest level of expertise. As we move forward into an increasingly complex tax landscape, Loeffler Financial Group’s presence and contributions at events like these will undoubtedly continue to shape the future of taxation and financial planning.
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A MUST READ if using digital payment tools or reselling tickets
A recent tax law change by this edition of Congress now requires transaction reporting to the IRS for anyone receiving more than $600 in payments through digital payment tools like PayPal, Venmo, and CashApp. It also impacts anyone using transaction platforms to buy or sell tickets for sporting events and concerts. Here is what you need to know.
What is happening now
They need your Social Security number. If you use digital payment platforms you will now need to provide your Social Security number and a valid name and address to accept digital payments or to buy and sell tickets online.
The IRS will know. Most of these transactions for those receiving funds will now have this activity reported to the IRS if the total for the year exceeds $600. This is true even if you lose money on the transaction. It will be done using Form 1099-K and will be issued to you in January.
Your taxes may be more complicated. If the IRS considers the transaction a business transaction, you will now need to report the transaction on your 2022 tax return, even for casual transactions that lose money. This is often the case when selling event tickets for a loss or taking digital payments at a garage sale.
You may receive many 1099-Ks. You can expect to receive a separate 1099-K from every platform you use where you exceed the $600 threshold.
The IRS watchdog approach. Prior to 2022, the reporting threshold was $20,000 AND more than 200 transactions. But with the perceived under-reporting of income by those in the gig economy, the transaction threshold was eliminated and the dollar threshold was lowered to $600. Now the IRS will use their computer auditing to compare your 1099-Ks with what you report on your tax return and audit you if they do not match.
What to do now
Coach your friends. Whenever you exchange money with friends in a digital format like Venmo, have them mark the transaction as non-business. Each application will handle this differently, but it is critical you do this to avoid getting a 1099-K in error.
Use cash or check. When receiving payments from friends, if there is potential for error ask for a check or cash. This will avoid the 1099-K reporting mess.
Split payments. When splitting a bill at a restaurant, do not have one person pay and then get reimbursement. Instead, ask the restaurant to split the bill and everyone pay their share. You can make this easy on your server if you are willing to split the bill evenly.
Understand the problem. When receiving a digital payment, you are relying on the person paying you to code the transaction correctly. Unfortunately, you cannot make them do it correctly, so you now need to keep track of digital money received, who it was from, and for what purpose.
True business transactions. For those of you in the gig economy, you have a different problem. Many reporting platforms are inconsistent on reporting. Some will report your income twice, once on a 1099-K and again on another tax form (1099-MISC or 1099-NEC). You must actively monitor this information. Plus, you need to know whether the amount reported is gross proceeds (required) or whether they netted out their fees.
Casual users of seller platforms are now in business. Infrequent users of places like E-Bay, Etsy and Amazon are now in business when payments received are more than $600. Be prepared to create a business tax return on Schedule C of your Form 1040.
This seemingly simple change in the tax code is having a wide-reaching impact. It will further complicate filing taxes AND processing taxes for the IRS. Given the level of public outcry, a roll back of this new rule is possible, but given the nature of Congress, do not plan on it.
The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit. However, some returns have errors or need more review and may take longer to process. The IRS works hard to get refunds to taxpayers quickly, but taxpayers shouldn’t rely on getting a refund by a certain date.
Things that can delay a refund:
- The return has errors, is incomplete or is affected by identity theft or fraud.
- The return needs a correction to the child tax credit or recovery rebate credit amount.
- The return has a claim filed for an earned income tax credit, additional child tax credit, or includes a Form 8379, Injured Spouse Allocation PDF.
- The time it takes a taxpayer’s bank or credit union to post the refund to the taxpayer’s account.
The IRS will contact taxpayers by mail if it needs more information to process their returns.
The fastest way to get a tax refund is by filing electronically and choosing direct deposit.
Taxpayers can check the status of their refund online.
To check the status of a refund, taxpayers should use the Where’s My Refund? tool on IRS.gov. If taxpayers file electronically, they should wait twenty-four hours before checking the status of their refund. If taxpayers file a paper return, they should wait four weeks before checking the status.
Loeffler Financial Group, along with the IRS representatives on the phone and at Taxpayer Assistance Centers can only research the status of a refund if:
- It’s been 21 days or more since the taxpayer filed the return electronically.
- It’s been six weeks or more since the taxpayer mailed the return.
- The Where’s My Refund? tool tells the taxpayer to contact the IRS.
What taxpayers should do if they have incorrect or missing documents?
Taxpayers should make sure they have all their documents before filing a tax return.
Taxpayers who haven’t received a W-2 or Form 1099 should contact the employer, payer or issuing agency and request the missing documents. This also applies for those who received an incorrect W-2 or Form 1099.
If they can’t get the forms, they must still file their tax return on time or get an extension to file. To avoid filing an incomplete or amended return, they may need to use Form 4852, Substitute for Form W-2, Wage and Tax Statement or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc.
If a taxpayer doesn’t receive the missing or corrected form in time to file their tax return, they can estimate the wages or payments made to them, as well as any taxes withheld. They can use Form 4852 to report this information on their federal tax return.
If they receive the missing or corrected Form W-2 or Form 1099-R after filing their return and the information differs from their previous estimate, they must file Form 1040-X, Amended U.S. Individual Income Tax Return.
Most taxpayers should have received their documents near the end of January, including:
• Forms W-2, Wage and Tax Statement
• Form 1099-MISC, Miscellaneous Income
• Form 1099-INT, Interest Income
• Form 1099-NEC, Nonemployee Compensation
• Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund
• Letter 6419, 2021 Total Advance Child Tax Credit Payments
• Letter 6475, Your 2021 Economic Impact Payment
Incorrect Form 1099-G for unemployment benefits
Many people received unemployment compensation in 2021. Unemployment compensation is taxable and must be reported on the recipient’s tax return.
Taxpayers who receive an incorrect Form 1099-G for unemployment benefits they did not get should contact the issuing state agency to request a revised Form 1099-G showing their correct benefits. Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only the income they did receive.
Reconciling advance child tax credit or economic impact payments
People who need to reconcile advance child tax credit payments or claim the recovery rebate credit will need information about 2021 payments when they file.
These individuals must have the total amounts of advance child tax credit payments to receive the remainder of their child tax credit and the amount of their third Economic Impact Payment to claim a recovery rebate credit. Taxpayers should check their online account or review Letter 6419, 2021 Total Advance Child Tax Credit Payments, and Letter 6475, Your 2021 Economic Impact Payment, for their total payment amounts. This will help them file an accurate return. If they have lost or misplaced these letters, they can check their online account. Married spouses who received joint payments will need to log into their own online account or review their own letter for their portion of the total payment. If filing a 2021 return as married filing jointly, they should add the payments together to provide the total amount.
Loeffler Financial Group is here to help. Schedule a tax appointment with one of our expert tax advisors today, 717-393-7366.
Right about now you’re probably wading through tax records and filling out your tax return. But it’s a daunting task – one that can be frustrating and eat up more hours than you have to devote to it.
But you don’t have to go it alone. Loeffler Financial Group continues to keep up with the tax code. Our expertise can help ensure that you get all the deductions and credits you are eligible to receive.
Here are the top 10 reasons why you may want to hire a professional tax professional:
- It can save you money. If your tax preparer finds even one deduction or tax credit you may have missed, it can easily exceed the fee it costs to have a professional prepare your return.
- It saves you time. The Internal Revenue Service reports that it takes nearly 20 hours to complete the average tax return with deductions. Your time is worth money. How much is it worth to you to get that time back?
- Tax professionals can answer your questions and resolve issues. It’s very likely you will have questions about your taxes. Calling the IRS means you could be on hold for hours. Tax professionals can answer most of these instantly.
- The tax code is very complicated. Professional tax preparers keep up with it and all those changes each and every year so you don’t have to.
- You gain peace of mind. Just knowing that a professional is handling your taxes reduces stress.
- Making mistakes can be very costly. In terms of missed deductions or triggering an IRS letter or audit; a tax professional can help eliminate errors and ensure your returns are prepared correctly.
- You benefit with money-saving tax planning. Tax professionals can advise you now and all year round on the best strategies to make smart tax-saving decisions.
- Your previous returns can be also reviewed. A tax professional can look at your past returns to see if any deductions were missed and, if so, amend them for you.
- You can reduce your risk of an audit. And, if you are audited or the IRS starts asking questions you can’t easily answer, a professional tax preparer knows how to deal with the IRS.
- It takes the hassle out of doing it yourself.
If you plan to hire a tax professional to prepare your taxes, you do need to gather and organize your records, including W-2 forms, 1099 forms, mortgage and bank statements, charitable contributions, and so forth. Being organized saves your tax preparer time and keeps the fees down. Loeffler Financial Group is here to help every step of the way. Call 717-393-7366 to schedule your tax appointment today.
2022 Tax Deductions and Tax Exemptions
Standard Deduction
- Single: $12,950
- Joint returns & surviving spouses: $25,900
- Married filing separately: $12,950
- Head of household: $19,400
The standard deduction increases by $1,400 for a married taxpayer aged 65 or older or blind ($2,800 if both 65 and blind); by $1,750 for a single taxpayer aged 65 or older or blind ($3,400 if both 65 and blind).
Personal Exemptions: Suspended through 2025
No personal exemption is allowed to an individual who is eligible to be claimed as a dependent on another taxpayer’s return.
September 10, 2021
Employees Who Work for Tips – If you received $20 or more in tips during August, report them to your employer. You can use Form 4070.
September 15, 2021
Individuals – Make a payment of your 2021 estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the third installment date for estimated tax in 2021.
Partnerships – File a 2020 calendar year income tax return (Form 1065). This due date applies only if you were given an additional 6-month extension. Provide each shareholder with a copy of Schedule K-1 (Form 1065) or a substitute Schedule K-1.
S corporations – File a 2020 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you made a timely request for an automatic 6-month extension. Provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1.
Corporations – Deposit the third installment of estimated income tax for 2021. A worksheet, Form 1120-W, is available to help you make an estimate of your tax for the year.
Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in August.
Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in August.
Questions? Call one of Loeffler Financial Group Tax Advisors at 717-393-7366.
Avoid These Small Business IRS Audit Mistakes
Businesses that are slowly emerging from the COVID-19 pandemic should now keep their eye on another looming obstacle: IRS audits. In late 2020, the IRS announced that it will increase tax audits of small businesses by 50 percent in 2021. Here are several mistakes to avoid if you do get audited by Uncle Sam.
- Mistake: Missing income. A long history of investigating has led IRS auditors to focus on under-reported income. If you’re a business that handles cash, expect greater scrutiny from the IRS. The same is true if you generate miscellaneous income that’s reported to the IRS on 1099 forms. Be proactive by tracking and documenting all income from whatever source. Invoices, sales receipts, profit and loss statements, bank records—all can be used to substantiate income amounts.
- Mistake: Higher than normal business losses. Some small businesses struggle in the early years before becoming profitable. If your company’s bottom line never improves, the IRS may view your enterprise as a hobby and subsequently disallow certain deductions. As a general rule, you must earn a profit in three of the past five years to be considered a legitimate business.
- Mistake: Deductions lacking substantiation. Do you really use your home office exclusively for business? Does your company earn only $50,000 a year but claim charitable donations of $10,000? Do you write off auto expenses for your only car? The key to satisfying auditors is having clear and unequivocal documentation. They want source documents such as mileage logs that match the amount claimed on your tax return and clearly show a business purpose. If you can’t locate a specific record, look for alternative ways to support your tax return filings. In some cases, a vendor or landlord might have copies of pertinent records.
- Mistake: No expense reports. If you use your credit card for business, create an expense report with account numbers and attach it to each statement. Then attach copies of the bills that support the charges. This is an easy place to blend in personal expenses with business expenses and auditors know it.
- Mistake: No separate books, bank accounts or statements. Never run personal expenses through business accounts and vise versa. Have separate bank accounts and credit cards. A sure sign of asking for trouble is not keeping the business separate from personal accounts and activities.
- Mistake: Treat the auditor as an enemy. Auditors have a job to do, and it’s in your best interest to make their task as painless as possible. Try to maintain an attitude of professional courtesy. If you’re called to their office, show up on time and dress professionally. If they come to your place of business, instruct staff to answer questions honestly and completely.
Please call Loeffler Financial Group if you either need help preparing for an upcoming IRS audit or would like to know how to audit-proof your financial records.
Filing season reminder: An extension to file is not an extension to pay taxes
For most individual taxpayers the tax filing and payment deadline was postponed to May 17, 2021. Those who need more time to file beyond the postponed date, can request an eextension to file.
Taxpayers must request an extension to file by May 17, or they may face a failure to file penalty. This extension gives them until October 15, 2021 to file their tax return. An extension to file is not an extension to pay. Taxes must be paid by May 17 to avoid penalties and interest on the amount owed after that date.
How to request an extension to file:
To get an extension to file, the IRS urges taxpayers to do one of the following:
- File Form 4868 through a tax professional, such as Loeffler Financial Group
- 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 Monday, May 17 due date.
If you are still panicking to get all your documentations organized and ready for taxes to be prepared, contact Loeffler Financial Group to file an extension before the May 17th deadline.
