Rapidly approaching tax filing deadlines inspire many to vow that we’re finally going to organize that bottomless shoe box of receipts and documents that we will "get to later". One of the many questions we've been getting this year is what documentation should I retain and how can I prepare for next year's taxes? Tax planning is always important, but with the financial impact that this year’s pandemic may have imposed, you should prepare now to minimize your tax liability and/or maximize your savings from the new tax rules? With the extension being moved to July 15th, we now have less time to prepare for next tax season. We want to make it easier for you by helping you understand what should be kept, in what format and for how long. Read More...
Congress Reinstates OSLT for 2020
What is the OSLT? The oil spill liability tax (OSLT) expired on December 31, 2018, and therefore was not required for the 2019 calendar year. Effective January 1, 2020, the law reinstated the oil spill excise tax imposed on crude oil and imported petroleum products. The cost of the OSLT is calculated at a rate of $0.09 per barrel (approximately $0.00214 per gallon) of crude oil products (including natural gasoline used as denaturant). How is the OSLT usually filed? This excise tax is filed quarterly with IRS Forms 6627 and 720, but deposits are required for each semimonthly period in which the tax liability is incurred. The amount of this deposit must not be less than 95% of the amount of net tax liability incurred during the Read More...
Refundable Biodiesel Blender Credits Extended
Under the Further Consolidated Appropriations Act of 2020, the refundable biodiesel blender credits were extended. How is the refundable biodiesel blender credit usually filed? A one-time claim can be made for the $1.00/gallon refund on biodiesel mixture gallons for 2018 and 2019. Total gallons for these two years need to be combined and reported on one Form 8849, Claim for Refund of Excise Taxes. Form 8849 Schedule 3, Certain Fuel Mixtures and the Alternative Fuel Credit, must be included with the submission with appropriate gallons reported on Line 2. It should be noted that the refund received from these credits is not-taxable. You can find additional rules and information on the IRS website here. Now What? The 180-day claim period Read More...
Tax Benefits for Back to School Shopping!
This from the MN Department of Revenue: It’s almost time to start back-to-school shopping and the Minnesota Department of Revenue is reminding you that most school supply purchases qualify for valuable K-12 tax benefits on your 2019 Minnesota income tax return. Remember to save your school supply receipts. What K-12 tax benefits does Minnesota offer? Two Minnesota tax benefits help families pay their child’s education expenses: the K-12 Education Credit and the K-12 Education Subtraction. Both benefits reduce your state tax and could provide you a larger refund when filing your Minnesota income tax return. Last year, more than 33,000 families received the K-12 Education Credit and saved an average of $244. Over 178,000 families Read More...
What Are The Best Ways To Save For College?
A college education can be one of the most important investments you ever make. But the benefits of your child's increased earning power and expanded horizons come at a price — college is expensive. Many families finance a college education with a combination of resources, but your savings are the cornerstone of any successful college funding plan. So it's important to start saving as soon as you can. For 2018/2019, average costs for tuition, fees, room, and board are: $21,370 — public college $48,510 — private college (many private colleges cost substantially more) Source: College Board, Trends in College Pricing 2018 Where should you put your college savings? There are many options to choose from: 529 plans Read More...
Big Change in Alimony Rules
There have been many tax changes that impact filers during this year's tax filing season. We will be sharing as much information as possible to make this season simpler for you. Today, we share about changes that have been made for alimony rules, and how they may apply to your situation. For payments required under divorce or separation instruments that are executed after Dec. 31, 2018, the deduction for alimony payments is eliminated. Recipients of affected alimony payments will no longer have to include them in taxable income. The above rules for alimony payments also apply to payments that are required under divorce or separation instruments that are modified after Dec. 31, 2018, if the modification specifically states that the Read More...
Filing Extension for U.S. Tax Returns
The new tax law passed this year is more complicated than it has been in decades. Many people who have traditionally done taxes on their own are opting to switch to a Certified Public Accountant to ensure they comply with the law and minimize their tax liability. As the tax law becomes more complex, there are situations when you will need to file for an extension of time to file your income tax returns. DID YOU KNOW: The IRS allows taxpayers to file a 6-month extension which is free, easy, and electronic and this can be done for any reason if you need more time to prepare your taxes. An extension form needs to be filed by April 15th for individuals and corporations and March 15th for partnerships and S corporations. An extension moves Read More...
IRS waives estimated tax penalty for farmers, fishermen who…
The Internal Revenue Service (IRS) will waive the estimated tax penalty for any qualifying farmer or fisherman who files his or her 2018 federal income tax return and pays any tax due by Monday, April 15, 2019. The IRS is providing this relief because, due to certain rule changes, many farmers and fishermen may have difficulty accurately determining their tax liability by the March 1 deadline that usually applies to them. For tax year 2018, an individual who received at least two-thirds of his or her total gross income from farming or fishing during either 2017 or 2018 qualifies as a farmer or fisherman. Further details can be found in Notice 2019-17, posted today on IRS.gov. Contact us today for additional questions relating to Read More...
IRS Warns: New Phishing Scam
The Internal Revenue Service (IRS) sounded the alarm about a new phishing scam in which cybercriminals are sending out fraudulent emails impersonating the IRS, claiming the attachments are tax transcripts, to fool recipients into clicking on and opening files containing malware that could infect their computers. The scam email bears an attachment labeled “Tax Account Transcript” or something similar and the subject line uses some variation of the phrase “tax transcript”. If you receive an email like this, do not open the email or the attachment. If you are using a work computer and you do open it, notify your company’s technology professionals as soon as possible. This malware is problematic for businesses, as the malware could Read More...
Can I Still File Taxes Despite the Government Shutdown?
In an effort to keep all of our clients aware of variables that may impact them, we want to update you with information as it becomes available. As of January 7th, 2019, the Internal Revenue Service (IRS) has stated that tax returns will be processed beginning January 28, 2019 and taxpayers will be provided refunds as scheduled (despite the government shutdown). “We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig. The IRS will be recalling a significant portion of its workforce, currently furloughed as part of the government shutdown, Read More...
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