Important September 30th tax deadlines

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  FINANCIAL FREEDOM PRESS    
  Volume 5 Issue 13

 GREAT NEWS AS WE WENT TO PRESS 

MT Austin and Associates just learned that we have been chosen as
“One of the Best Accountants in Delaware County”.
We want to thank all for your continued support!

Dear Valued Subscriber:

If you are a tax client, please remember to upload your tax information by the due date to avoid the $100 rush fee effective October 1.

We also wanted to let you know about the COVID penalty relief being offered to certain tax filers for 2020 and 2021 tax years. You can read the press release on the IRS website to see if you qualify to participate by the September 30th deadline.

As always, please continue to follow us on LinkedInFacebookInstagram and our @thewealthactivator Instagram page.

Have a great weekend and thank you again for your confidence in MT Austin and Associates!

Mary Tonita Austin
CEO, MT Austin and Associates and The Wealth Activator

 ShareTweetForwardCopyright © 2022 MT Austin and Associates, All rights reserved.

Upcoming S-Corp and Partnerships Tax Deadline

If you are fiscally responsible for a calendar year S-Corporation (Form 1120S) or Partnership (Form 1065) and you filed a request for an extension, your six month extension is about to expire and your tax return must be filed by September 15th, 2022. Non filing fees and penalties are applied after this date so please contact your tax accountant right away to confirm your filing status.

Wishing you many happy returns!

MT Austin

2022 Tax update for Teachers

If you are a teacher, the IRS allows you to deduct a flat amount to cover your out of pocket expenses for school supplies during the year. This amount has been stagnant at $250 for decades.

For 2022, the amount increased to a maximum of $300 and will increase in $50 increments in future years based on inflation.

Check out the attached article reposted from CPA Practice Advisor for more details.

Many Happy Returns!

https://www.cpapracticeadvisor.com/2022/08/15/irs-changes-amount-teachers-can-deduct-for-classroom-expenses/69520/

What does financial freedom look like to you?

FINANCIAL FREEDOM PRESS    
  Volume 5 Issue 10

Since May, we have been celebrating freedom – those who died for certain freedoms (Memorial Day); the freedom of the last enslaved Africans in Texas (Juneteenth) and US’s freedom from Great Britain (4th of July). On July 18th, we celebrate a man who epitomizes the fight for freedom on his birthday, Nelson Mandela. The United Nations approved the celebration of Nelson Mandela International Day in 2010. The holiday is celebrated by encouraging “each person to dedicate 67 minutes of their time to collectively make a difference through volunteering, donations and community service”.

As our community service, MT Austin and Associates will be live on our Instagram page, for 67 minutes providing a FREE information session on personal money management and answering any of your personal money management questions. Sole proprietors are welcome to join and ask any business-related questions as well. The live will begin at 4:30 EST and will be your ONLY opportunity to receive FREE advice from our CEO. Feel free to share this invitation with friends and if you haven’t already, like our page and set your Instagram to receive notifications for all of our live videos.

If you are unable to attend, please leave a comment on our page or DM your questions. Also, be sure to review the saved live event at your convenience.

We also wanted to share a couple of additional financial resources:

● List of funding sources – Includes both local and national sources available to small business owners. Please note the deadlines for filing and contact the sources for more information about applying for these grants.      

● Restitution For anyone who may have been defrauded in a 2004-2017 Western Union scam, the deadline has been extended to recoup funds through August 31, 2022. Learn more at the Federal Trade Commission website.

Don’t forget that you can engage MT Austin and Associates to assist you with your mid-year financial checkup by signing up for a one-on-one one-hour “Sleep Better at Night” session. During the session, you will have an opportunity to discuss your current financial situation and set goals for the remainder of the year. Our summer calendar is filling up so please make your appointment today. (Our offices will be closed for Summer Break the first week of August.)

For those who still need to file their 2021 taxes,  don’t forget to upload your documents to your secure Verifyle by September 30th.  If you still have questions about tax issues prior to providing your documents , we suggest a 30-minutes “Sleep Better at Night” sessionNOTE: If you sign up for a session you will receive a 10% discount on your 2021 tax preparation.

Please continue to keep up to date on all of our services/program offerings by following us on LinkedInFacebook and Instagram. Also, keep your feedback coming about our new branding through our @thewealthactivator Instagram page.

Let’s celebrate Nelson Mandela through service to others and our own financial independence!

Mary Tonita Austin
CEO, MT Austin and Associates and The Wealth Activator

Are you an emerging business owner in Philadelphia? Before you pay for your Commercial Business License, you may want to check out this resource:

What is Jump Start Philly? – Business Services

What is Jump Start Philly? – Business Services
Photo by David McBee on Pexels.com

Jump Start Philly is designed to attract new businesses and entrepreneurs that create jobs to Philadelphia by exempting them from paying the Net Profits Tax and the Business Income and Receipts Tax, formerly the Business Privilege Tax, during the first two years of operations. Additionally, fees will be waived for eligible new businesses for a variety of licenses and registrations, including the Commercial Activity License, formerly the Business Privilege License.

All businesses are still required to apply for applicable licenses, but eligible new businesses pay no fee. To qualify for this exemption, your business must meet certain requirements.

For qualifying new businesses, exempt license fees include:

  • Amusement license
  • Food establishment license
  • Sidewalk café license
  • Curb market license
  • Street vendor license
  • Sidewalk sales license
  • Center City vending license
  • Neighborhood vending license
  • Newsstand license
  • Handbill distribution license
  • Weights and measures registration
  • Waste collection and recycling licenses
  • Towing license
  • Auto repair shop license or permit
  • Hazardous chemical license or permit

To qualify as a “New Business” for these exemptions:

  • The business must be a “New Business.” A New Business is a business that was not subject to Philadelphia business taxes at any time during the five Tax Years prior to starting business activity within Philadelphia.
  • The New Business must file with the Department of Revenue a New Business Waiver Application. This application is wrapped into the online process of registering for the Business Income and Receipts Tax, and within the paper application for the Commercial Activity License.

To maintain “New Business” status:

  • The New Business must have at least three full-time employees, who are not family members and who work in Philadelphia at least 60% of the time, by the first 12 months of the business and continuously through the 18-month anniversary of becoming a new business, and
  • Have at least six full-time employees, who are not family members and who work in the City at least 60% of the time from the 18 month anniversary of the business continuously through to the 24-month anniversary of operations.
  • A family member is defined as: a parent, spouse, life partner, child, sibling or relative-in-law

Note: If the Department of Revenue finds that a taxpayer claiming the status of a New Business was not entitled to that status after the fact, the taxpayer shall be liable for any unpaid taxes, interest, fees and charges that would otherwise have been due.

Exclusions, the term “New Business” does not include:

  • A business affiliated with or sharing substantial ownership or control with a business that has filed a business privilege tax return
  • A business created through an ownership change of a business that has filed a business privilege tax return, including, but not limited to:
    • A merger, acquisition or reorganization
    • The transfer of an existing business to a person who maintains the same or substantially similar business
    • And the closing of an existing business and its subsequent reopening as the same or similar business
  • A business formed for the purpose of evading or avoiding payment of taxes or fees
  • A business primarily engaged in holding, selling, leasing, transferring, managing or developing real estate

Contact:

For Business Income and Receipts Tax information –
Department of Revenue:
Phone: 215-686-6600
Email

Tax Update for Unemployment Recipients

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IRS PROVIDES INFORMATION ON 2020 UNEMPLOYMENT BENEFITS

The IRS has provided the following information regarding 2020 unemployment benefits and the 2021 tax filing season:

Unemployment benefits

A record number of Americans applied for unemployment compensation in 2020 due to the pandemic. Anyone who received unemployment benefits will need to report it on their tax returns.

However, the American Rescue Plan, enacted on March 11, 2021, excludes from income up to $10,200 ($20,400 if married filing jointly) of unemployment compensation received in 2020 for taxpayers with modified adjusted gross income under qualifying thresholds. Any amount over $10,200 is still taxable for each person. To determine if payments received for being unemployed are taxable, see the Interactive Tax Assistant on IRS.gov.

For those who have already filed their 2020 tax return and paid taxes on the full amount of unemployment compensation before the law was passed, they should not file an amended return. The IRS will automatically refund money to people who already filed their tax return reporting unemployment compensation.

The IRS will recompute any credits and deductions claimed on the original return. However, if the reduction of income now qualifies a taxpayer for a new credit not claimed on the original return, like the Earned Income Tax Credit (EITC), those taxpayers will need to file an amended tax return, Form 1040x, to claim the new credit. Taxpayers can see if they qualify for the EITC at IRS.gov.

Unemployment benefit recipients should have received a Form 1099-G, Certain Government Payments, from the agency paying the benefits. The form will show the amount of unemployment compensation they received in 2020 in Box 1, and any federal income tax withheld in Box 4.

Some states do not mail Form 1099-Gs. Taxpayers may need to get the electronic version from their state’s website.

Taxpayers who received an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits.

Taxpayers who are unable to obtain a timely, corrected form from their state should still file an accurate tax return, reporting only the income they received. A corrected Form 1099-G showing zero unemployment benefits in cases of identity theft will help taxpayers avoid an unexpected federal tax bill for unreported income.

Additionally, if taxpayers are concerned that their personal information has been stolen and they want to protect their identity when filing their federal tax return, they can request an Identity Protection Pin (IP PIN) from the IRS.

Generally, by law, unemployment compensation must be included as income. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in 2020.

If a taxpayer didn’t report income from gig work or unemployment compensation on a return, a corrected return can be filed using Form 1040-X, Amended U.S. Individual Income Tax Return. Form 1040-X can be filed electronically.

Taxpayers who owe but can’t pay in full always have options to seek help through payment plans and other tools from IRS.gov/payments.

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IRS PROVIDES INFORMATION ON 2020 UNEMPLOYMENT BENEFITS

Mary:

The IRS has provided the following information regarding 2020 unemployment benefits and the 2021 tax filing season:

Unemployment benefits

A record number of Americans applied for unemployment compensation in 2020 due to the pandemic. Anyone who received unemployment benefits will need to report it on their tax returns.

However, the American Rescue Plan, enacted on March 11, 2021, excludes from income up to $10,200 ($20,400 if married filing jointly) of unemployment compensation received in 2020 for taxpayers with modified adjusted gross income under qualifying thresholds. Any amount over $10,200 is still taxable for each person. To determine if payments received for being unemployed are taxable, see the Interactive Tax Assistant on IRS.gov.

For those who have already filed their 2020 tax return and paid taxes on the full amount of unemployment compensation before the law was passed, they should not file an amended return. The IRS will automatically refund money to people who already filed their tax return reporting unemployment compensation.

The IRS will recompute any credits and deductions claimed on the original return. However, if the reduction of income now qualifies a taxpayer for a new credit not claimed on the original return, like the Earned Income Tax Credit (EITC), those taxpayers will need to file an amended tax return, Form 1040x, to claim the new credit. Taxpayers can see if they qualify for the EITC at IRS.gov.

Unemployment benefit recipients should have received a Form 1099-G, Certain Government Payments, from the agency paying the benefits. The form will show the amount of unemployment compensation they received in 2020 in Box 1, and any federal income tax withheld in Box 4.

Some states do not mail Form 1099-Gs. Taxpayers may need to get the electronic version from their state’s website.

Taxpayers who received an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits.

Taxpayers who are unable to obtain a timely, corrected form from their state should still file an accurate tax return, reporting only the income they received. A corrected Form 1099-G showing zero unemployment benefits in cases of identity theft will help taxpayers avoid an unexpected federal tax bill for unreported income.

Additionally, if taxpayers are concerned that their personal information has been stolen and they want to protect their identity when filing their federal tax return, they can request an Identity Protection Pin (IP PIN) from the IRS.

Generally, by law, unemployment compensation must be included as income. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in 2020.

If a taxpayer didn’t report income from gig work or unemployment compensation on a return, a corrected return can be filed using Form 1040-X, Amended U.S. Individual Income Tax Return. Form 1040-X can be filed electronically.

Taxpayers who owe but can’t pay in full always have options to seek help through payment plans and other tools from IRS.gov/payments.

Of course if you have questions or need to file your taxes, contact our office by emailing support@mtaustinandassoc.com

Many Happy Returns!