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TaxMama’s® TaxQuips
Things to do in January 2022

 
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Listen to the Podcast

Watch the Podcast (on 1/11/22)
 

It's TaxQuips time from TaxMama.com®
Today TaxMama® wants talk to you about steps to take this month, and things to watch out for – even if they are annoying.

 

Dear Family,

2022 came rushing upon us so quickly. Did you also feel that it was just January of 2021 – and suddenly, we’re facing another new year? I blinked!

Let’s look at the some of the good and bad things that we are facing.

1) The IRS has significantly increased their online access for both taxpayers and tax professionals. (See our Good-Bye 2021 issue for details on how to use that access.)
This is a good thing – because we no longer have to wait for 6-12 weeks to activate a power of attorney or information authorization request. It can now be nearly instantaneous.

2) The IRS has locked the W-4 estimator while they re-tool for the new year. Considering that the IRS has always recommended that employees file a new W-4 with their employers early in January, that’s a bit short-sighted.
Meanwhile, you can use the W-4 estimators at Turbo Tax and H&R Block.

3) And speaking of IRS income reporting, I am hearing from tax pros that they are getting bombarded with frantic phone calls from clients who have just learned that they are getting 1099s from all the payment platforms for all transactions totaling $600 or more during 2021 (Paypal, Square, Zelle, Etsy, AirBnB, GooglePay, Apple, and others).
I don’t know why this is such a shock, it was announced in the middle of last year that this was coming. Why? Because when those platforms only issued the 1099-K for 200 transactions and $20,000, those people who didn’t get the 1099s, didn’t report the income. That’s billions of dollars of unreported income.
Folks, the money you get paid on those platforms IS generally taxable.
If you have related expenses, you can deduct the business expenses – just like any other business.

4) Speaking of 1099s – January is the month that all those forms need to be sent to anyone who provided services of $600 or more last year. Be sure you have their correct name, mailing address and Social Security number or Taxpayer ID number.
The request to get the Form W-9 filled out in January often results in rage and fury (worse than rage – sometimes leading to violence), and sometimes, refusal to provide that information. Why? Weren’t these people planning to report their income?
Solution for 2022 payments to service providers – get them to fill out that W-9 this month; or before they get the first payment in 2022. For more notes on my perspective and advice on this issue, read my answer about what to do THIS MONTH, when a contractor refuses to provide their SSN or TIN.

5) Estimated tax payments are due by January 18th. (The 15th falls on a weekend. The 17th is Martin Luther King, Jr. Day) When making your payments, please pay electronically. I am still hearing horror stories about people who mailed their checks months ago and the IRS still hasn’t recorded the payments in their accounts. And worse, the IRS Collections division is starting to issue lien notices and levy demands.

6) Student Financial Aid (FAFSA) forms are often due in January or February for the coming year. FAFSA requires tax information.  Even if the parents are separated or divorced, generally the application requires the financial information of both parents. Beware of assets belonging to the student – like Sec 529 accounts in their own names, IRAs, and Coverdell IRAs. You will need to provide a projection of the 2021 information. Don’t make this complicated. Use your logic based on your own financial activities for the year to fill out the form. You may have to modify later in the year, once the tax return is filed – and perhaps give FAFSA a copy.
Whew! That’s enough for now.

 
 

Incidentally, the IRS JUST announced that the nation's tax season will start on Monday, Jan. 24, 2022, when the tax agency will begin accepting and processing 2021 tax year returns.

And TaxMama's 2022-2023 Tax Calendar is up, ready for you to use.

And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion

To make comments please drop into the TaxQuips Forum.

 


 

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The Enrolled Agents Examination – PLEASE JOIN US

We will learn more about the new 2022-2023 EA Exam contents by next month.
Stand by for more news - and the dates of the free
Everything You Want to Know about the EA Exam sessions.

There will be sessions in February, March and April

The live class is over, but everything has been recorded.
If you still have time to  study to pass the EA exam this year
your clients will need your help.


 https://irsexams.school/signup/

Anyone signing up now gets access to over 40 educational tax videos (and downloadable MP3 files), as well as 12  3.5-hour Final Review sessions that specifically teach you how to answer the exam questions. And you remain in the class, at no additional charge to attend or view our sessions, until you pass - or even beyond.
(Just don't unsubscribe from the class emails)

Remember, if you are presently unemployed, check with your  unemployment office or business insurance coverage – they just might be able to pay your tuition. 
This is a great time to improve (or develop) your skills as a tax professional.

 




Everything You Wanted to Know About the 2021-2022 Enrolled Agent Exam.
Get all the information you need about this year's Special Enrollment Examination here.
https://taxmama.com/tax-quips/everything-you-want-to-know-about-the-ea-exam/

Watch this before you ask me questions, please.


And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion

To make comments please drop into the TaxQuips Forum.

Hugs

Eva


 


 

Some Helpful IRS Links

IRS CoronaVirus updates
https://www.irs.gov/coronavirus

Which IRS services are open and available – keep an eye on this link 
https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue

IRS Electronic Options
https://www.irs.gov/newsroom/irsgov-helps-taxpayers-get-tax-information-they-need-find-tools-for-filing-paying-checking-accounts-and-answering-questions

IRS Online Assistance Available
https://www.irs.gov/newsroom/irs-urges-taxpayers-to-use-electronic-options-outlines-online-assistance

Dealing with audit or collections issues – IRS is keeping this page up to date
https://www.irs.gov/newsroom/irs-unveils-new-people-first-initiative-covid-19-effort-temporarily-adjusts-suspends-key-compliance-program

Of course, all the filing and paying deadlines - including taxpayers overseas whose June 15th filing deadline has been pushed back to July 15th.
https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers?

And a great chart: How to Use the Tools on IRS.gov to Get Your Economic Impact Payment  https://www.irs.gov/newsroom/how-to-use-the-tools-on-irsgov-to-get-your-economic-impact-payment

There are lots more things going on – watch the information in the IRS Newsroom -  https://www.irs.gov/newsroom  and TaxMama.com  

 

California Resources

Unemployment Code Section 1126  https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=GOV&sectionNum=1126

EDD AB 5 – Employment Status
https://edd.ca.gov/Payroll_Taxes/ab-5.htm

CA Labor and Workforce Development Agency

https://www.labor.ca.gov/employmentstatus/

 EDD -  DE 40 tax audit guidelines
https://www.edd.ca.gov/pdf_pub_ctr/de40.pdf

To make comments please drop into the TaxQuips Forum.


Incidentally, I don't know if you know - TaxMama.com® is a free resource for people to get answers to tax questions BEFORE they make major, costly moves.

To make comments please drop into the TaxQuips Forum.
 




Small Business Taxes Made Easy

Well, my friends, the book is out and healthy.
The Kindle and audio versions are available.  

 You can get the audio book wherever audiobooks are sold - http://iTaxMama.com/4thEdition_Audio 

 

I would really appreciate it if you have the book and like it –
to please post a
review at Amazon.com .
   This is the best version of the book ever. 

 

And for those people in business, or starting a business,
or with clients who operate a business, we have completed the
12-week course based on the book, at CCH CPE Link.
It turned out really well and people found the information extremely helpful!
The course follows each chapter of the book – but also provides help to deal with your business issues during this COVID19 shutdown and quarantine. Who knows, it might help you  save your business – or your finances!


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