Money Matters

The Internal Revenue Service today upgraded a key online tool to enable families to quickly and easily update their bank account information so they can receive their monthly Child Tax Credit payment.

The bank account update feature was added to the Child Tax Credit Update Portal, available only on IRS.gov. Any updates made by Aug. 2 will apply to the Aug. 13 payment and all subsequent monthly payments for the rest of 2021.

As reported on Business Wire: :.--(BUSINESS WIRE)---"California is one of the few states that require paid tax preparers to be licensed or registered. Each professional has varying levels of skills and not all of them necessarily deal with preparing tax returns."

Are you receiving suspicious phone calls? People claiming they are they are the IRS and demanding money? 

The IRS has listed phone scams as one of the most prevalent tax scams underway today. Taxpayers are receiving aggressive and threatening phone calls by criminals impersonating IRS agents. The callers may demand money or even promise a refund to trick you into sharing private and personal information. During filing season, there is an uptick of complaints reporting phone scammers who are threatening arrest, deportation, license revocation, and other things. 

It's a scenario that keeps people up at night: you've discovered that you made a mistake on your taxes. Will the IRS come knocking on your door? Will federal agents sweep into your home and arrest you in the middle of the night?

Fortunately, neither of those scenarios is likely. Every year, thousands of taxpayers make honest mistakes on their forms and file Amended Returns using Form 1040X. Amended returns aren't just limited to mistakes that will cost you money. Often a correction involves claiming deductions that you missed, or additional tax credits, which can mean a larger refund for you.

According to the Federal Trade Commision, there are over 9 million victims of Identity Theft in the US every year. It becomes a stressful challenge for businesses, organizations and government agencies, including the IRS.

In most cases of Identity theft, you may not be aware that someone has stolen your identity. Identity theft happens when someone uses your stolen Social Security Number to file a tax return claiming a fraudulent refund. Luckily, the IRS is the first to detect the the fraud after you try to file your taxes.

If you conduct business either partially or in whole at home, you may be entitled to a home office deduction on your taxes. Here are a few things you should know about the home office deduction.

First, the portion of your home you are claiming the deduction must be used regularly and exclusively for business purposes. This area of your home must also be your principal place of business, or a place where you meet clients or customers in the normal course of business. It also applies if the space is a separate structure not attached to your home, like a garage or studio.

If you have a family-owned business, chances are you have likely hired (or are planning to hire) an easily accessible hiring pool: members of your own family. Doing so has its pros and cons; only you know if employing those closest to you will be advantageous to your business. While we cannot tell you whether you should hire your family, we can advise you on how you need to treat them with respect to wages and specifically payroll taxes.

One of the advantages of hiring family members is the exclusion of some payroll taxes on their wages. Depending on what type of business you have (corporation, partnership, or sole proprietorship) and depending on which family member you employ (child, parent, or spouse), you may not need to pay:

• Federal Unemployment taxes (FUTA)
• Social Security and Medicare taxes (FICA)
• State Unemployment Insurance (UI), Employment Training Tax (ETT), and State Disability Insurance (SDI)

The rules for each of these taxes varies, so we advise you to contact your tax preparer to ensure you are paying your family employees correctly and to ensure you are reporting wages and taxes correctly. You can then make a well thought-out decision as to whether these tax breaks will be worthwhile to you and to your family./p>

Many of my clients ask me about trusts and whether they should have one. Yes, you should! A trust protects your estate for your beneficiaries, reduces or eliminates taxes, provides for managing your estate should you be become incapable of doing so, avoids probate, avoids your will being contested, and protects the privacy of your estate (wills and probate are public proceedings.)

Business One: “Fred” is a skilled electrician. He worked 20 years for the same company, and one day realized that he was getting paid $20 per hour but was billing $80 an hour for his time. “This is unfair!” he thought, so he decided to sit for the contractor’s license exam and open his own business. He had $10,000 saved up, and he knew that he would be able to get clients the same way his boss did very easily.