Heads-up: this article is outdated and a new one serves to replace it; please check it out!
“What is an IRS Account Transcript and Why Do I Need One?”
During the pandemic, we began requiring all clients to submit a copy of their IRS Account Transcript along with their Tax Organizer and other annual tax prep documentation. Initially, this was to confirm the amounts of stimulus payments and child tax credit payments. But what we found was that it was a great way to confirm how much the client paid to the IRS for quarterly estimated taxes — and to make sure we credited the payment to the correct tax year. As such, we now always require a copy of this particular transcript — and wish we’d done so all along! It’s free, reasonably easy, and reliable. In the end, it saves the clients (and us) a load of potential headaches.
It’s important to note that there is more than one type of transcript, and each meets a different need. For example, if you’re trying to prepare a tax return for a prior-year and need a list of all the informational documents filed with the IRS that are associated with your SSN, you’d want a Wage & Income Transcript. For more info on how to do that, and the various types of transcripts out there, please see the comprehensive article I wrote for MSN on the topic.
An Account Transcriptlists information on payments and credits posted to your account throughout the year, such as quarterly estimated tax payments. The best news where downloading any transcript is concerned? All you need is a photo ID, a mobile phone with a camera, an email address, and an Internet connection.
Keep in mind that the IRS will not email you a transcript; you must go online and create or log in to your account and download it. There are email scams out there that entice folks to click on a link or attachment with the promise of an IRS Online transcript – don’t fall prey.
“How Can I Download My IRS Transcript?”
1. From the IRS website, you’ll need to create an ID.me account. (This is the most involved of the steps, but thankfully you only have to do it once; moving forward, you’ll simply sign into the same account each time.) The ID.me website uses facial recognition to confirm your identity, so you’ll need your phone to take a selfie.
If you need help creating your ID.me account, the ID.me Help Center spells out the process very clearly. You can also watch this video or review these written instructions if you want to review the process first.
One note: if you were using the old IRS account system, you won’t be able to log in with your previous IRS username and password anymore — the IRS sunsetted that program in early 2023 and now you need to use the ID.me system. At this point, most of our clients already have ID.me set up, but this may be new to you if you’ve never downloaded a transcript before.
2. Once your account is created, log in, go to the IRS’s Get Transcript page and click the “Get Transcript Online” button.
The IRS “Get Transcript Online” starting page
3. Select the reason you need a transcript (it’s fine to just select “Other”).
The IRS “Get Transcript” tool reason-selection screen
4. Leave the Customer File Number blank and click “Go.” The screen will display all four (or five, if you have non-filing years) transcript options and the available years.
IRS “Get Transcript” tool – sample options for available transcripts to download
5. Under “Account Transcript”, click the tax-filing year (the top line of the lower-left box — “2023” in this example).
6. After you select your transcript, like magic, a PDF will pop up in a new tab of your browser with all the information you need. (Or it will say “No record of return filed,” if nothing has posted yet.)
7. Print the file to PDF and save it somewhere safe, along with the rest of your tax season documents.
(And if you want to get deep into the weeds, NASFAA has an amazing “Tax Transcript Decoder” that compares the fields on a tax return to the fields on a tax return transcript, and Saving To Invest had fun with highlighters when creating a legend for each row on an account transcript. Tax nerds unite!)
“What About State Information?“
Each state has its own idiosyncrasies, and many have their own system — but quite a few states are using the same software company, so they often look and act similar. Our firm is located in Chicago, so to get a list of the estimated tax payments you’ve made to the state of Illinois, go to https://mytax.illinois.gov/?link=1040EPy (without logging in) and enter your SSN, Name, and the tax year in question.
If you also made payments from a corporation or partnership, you’ll need to log into your company’s MyTaxIllinois business account to get those.
“Now What Do I Do With These Files?”
Seriously? You make sure to use your accountant’s secure file transfer system to send them your PDFs. Please do not ever email sensitive documents. It puts both you and your CPA at risk.
As is the case every year, we’re hearing from lots of folks confused about when to send a 1099 form or other “information returns” to someone. It is true that over time, these forms have continued to change, and the rules have become more specific… but the basics remain the same. The most important point is that only businesses need to issue 1099s — if you paid someone for personal purposes, you are not (yet) required to send them or the IRS a Form 1099.
WHAT’S NEW (or isn’t) FOR 2023: – Beginning in 2022, the 1099-NEC was made so that it’s no longer year-specific; there are no changes to the form for 2023. – The IRS launched IRIS, a new free online portal, for businesses to file 1099 returns. (Beginning January 2024, you will no longer be able to file using a legacy transmitter code using the old FIRE system.) – You must file now file 1099 Forms electronically if you have 10 or more information returns (down from 250). – There are even more complexities regarding whether or not to issue a 1099 based on the payment type, and I expect this area to become even more challenging in future years, as new payment platforms continuously come into being.
Here’s a crash course for each type of form, followed by an FAQ.
1099-NEC This form was new for 2020 and replaces the old Box 7 of Form 1099-MISC. “NEC” stands for “non-employee compensation”. It is due to recipients and the IRS by January 31st (or the first business day after that, if 1/31 falls on a weekend).
If you paid: 1) a NON-corporation (*see below); 2) for services (not products); 3) via check, cash, ACH, Zelle, or wire transfer — but not merchant services or electronic payments (such as credit & debit cards, PayPal Business, Venmo Business (**see below); 4) $600 or more in a calendar year; then you need to send them a 1099-NEC.
(*) A lot of folks get confused and think the rule is if you paid an “individual,” but really the rule is a “non-corporation,” which means that partnerships and LLCs are included. Just because they have a business name doesn’t mean they’re incorporated. You cannot depend on the company’s name to determine corporate status, nor can you rely on the state LLC/Corp database, as it only indicates the entity type at the state level — almost any type of entity may elect corporate status with the IRS.
So, keep in mind that a company can be an LLC but be taxed as a corporation. In this case, you would not need to send them a 1099, because in the eyes of the IRS, they are incorporated. Here’s an example of a W-9 showing an LLC that is taxed as an S-Corp:
This is one of many reasons you should collect Form W-9 from all service vendors before giving them their first check, just to be safe. The person filling out the W-9 will indicate their entity type and whether or not they are taxed as a corporation.
There’s also an exception to the incorporation rule for attorneys and law firms. You must issue a 1099 to a lawyer or law firm regardless of whether they are incorporated. (Law firms and attorneys have so many specialized 1099 issues, they get their own blog post.)
(**) There’s a lot of confusion over Venmo and PayPal, because there are personal-use “Friends & Family” versions as well as business versions of both platforms. Legally, no business should be using the non-business versions of these payment types… but in real life, many do. It’s very hard to distinguish which payments were made using which method — in theory, a 1099-NEC would need to be issued to a vendor who was paid via a personal Venmo or PayPal method, but I’m not sure how this would be tracked. My recommendation (for many reasons) is to only use the business versions, and then the 1099-NEC is a non-issue (because Venmo and PayPal will issue a 1099-K instead).
I know, that’s all very confusing. Here’s a nice, simplified decision-tree provided by our friends over at Bookkeepers.com, courtesy of Bookkeeping Buds.
However, it’s easy to end up with issues like “what if I paid with my credit card, but used PayPal Friends & Family,” or “I use a practice management system that is funded with a bank account, so why do they issue a 1099-K,” or any number of confusing situations based on payment type. There’s simply no easy answer to these questions.
It’s so confusing, in fact, that my colleague Jennifer Dymond saw the need, and created an absolutely incredible resource at 1099problems.io which goes into detail about which payment methods are included on a 1099-K versus which ones you must issue 1099-NEC or 1099-MISC for yourself; it’s maintained regularly and updated as the proliferation of non-traditional payment methods continues. The first 1,099 people to subscribe using code DANCING1099 will receive 10% off their first order (offer expires March 31, 2024).
1099-MISC
Items such as rent payments, royalties, attorney settlements (as mentioned above, not payments for legal services), and medical healthcare payments will still be reported on Form 1099-MISC, though the form has been redesigned and the boxes renumbered.
Report prizes and awards of $600 or more that are not for services performed in Box 3. Include the fair market value of merchandise won. And be careful here, as it is easy to accidentally include these on Form 1099-NEC if the recipient also provided unrelated services.
Rent paid ($600 or more) (Box 1)
Royalties paid of at least $10 or more (Box 2)
Prizes and awards and certain other payments ($600 or more, see instructions for Form 1099-MISC, Box 3 for more information)
Backup withholding or federal income tax withheld (any amount) (Box 4)
Amounts paid specifically to physicians, physicians’ corporations, or other suppliers of health and medical services ($600 or more) (Box 6)
Direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment (Box 7)
Gross proceeds paid to an attorney ($600 or more whether or not incorporated) (Box 10) – “made to an attorney in the course of your trade or business in connection with legal services, but not for the attorney’s services”; for example, a settlement agreement.
The deadline for providing this form to recipients is the same as above, January 31st. However, the deadline for filing 1099-MISC with the IRS is February 28 if filing on paper, and March 31 if filing electronically.
1099-K
It’s unlikely that anyone reading this will be in the position of issuing Form 1099-K to vendors — but you should know about this form, for a few reasons: 1) You are likely to receive one. 2) It’s the reason you don’t have to issue 1099-NEC to anyone you pay via credit card/debit card, a business PayPal account, a business Venmo account, or any “merchant service” system. 3) You may need to reconcile this form against the amount of sales income you report on your tax return.
Form 1099-K is for payments made in settlement of “reportable payment transactions”, which is any credit card, payment card or third-party network transaction. So if you receive payments in this way (unless you only accept checks, e-checks, ACH, or zelle/QuickPay, you probably do), then you’ll get a 1099-K for this total.
But because these amounts are reported to the IRS for you, you don’t need to issue 1099-NEC or 1099-MISC forms to vendors whom you paid using one of these methods. In that case, the recipient could end up having the same income reported to the IRS twice.
The rule used to be that this form was issued to anyone who had more than 200 transactions or $20,000 worth of transactions — but starting in 2024, that threshold will drop to only $600. (This implementation has been delayed twice already and AICPA is lobbying for a more reasonable threshold.) The IRS is now planning a phase-in of $5,000 for tax year 2024.
As a bookkeeper, accountant or tax preparer, it’s important to protect your small business clients by making sure all taxable income is being reported on their books/returns. If the 1099-K is for an amount that is lower than what’s on the income section of the Profit & Loss, it’s not likely to be an issue. But if it’s higher, you’ll need to do a reconciliation to show that the difference was due to non-taxable receipts such as sales taxes collected, tips collected, refunded sales, and the like.
1099-INT
This form is issued to anyone who lent your business money, and your business paid them at least $10 of interest in the past calendar year. It includes owners, partners, and shareholders.
Note: do not issue this form for accrued interest; it is only for actual payouts of interest in cash or trade.
The form is due to recipients by January 31 (February 1 in 2021), but isn’t due to the IRS until March 1 if filing on paper and March 31 if e-filing.
If not e-filing, you can use the IRS’s fill-in pdf Copy B for the recipient copy, but for the version that goes to the IRS, you have to order an official form with special scannable ink — they’re free, but they take a while to be mailed, so fill out your request early. Make sure to mark the year you are filing for, not the current year — an easy mistake to make.
Another note: I have had clients reach out confused by the language “You are not required to file Form 1099-INT for interest on an obligation issued by an individual”. This means if the loan were TO an individual rather than FROM one, and the individual paid interest to the company. (This is not usually the case.) In that situation, the individual would not have to issue the company a 1099-INT (although the company would still have to declare the interest income).
1099-DIV
This form is issued to a shareholder of a C-Corporation for dividends or other distributions paid in the past calendar year.
Most folks don’t think this applies to them — but if you own a business that is taxed as a C-Corp, and you took money out that wasn’t W-2 or loan repayments, then you may have issued yourself dividends. (And if it was for a loan repayment, did you pay the required amount of interest? If so, see the “1099-INT” section above.)
The form is due to recipients by January 31 (February 1 in 2021), but isn’t due to the IRS until March 1 if filing on paper and March 31 if e-filing.
If not e-filing, you can use the IRS’s fill-in pdf Copy B for the recipient copy, but for the version that goes to the IRS, you have to order an official form with special scannable ink — they’re free, but they take a while to be mailed, so fill out your request early. Make sure to mark the year you are filing for, not the current year — an easy mistake to make.
1098
This form is to report mortgage interest and real estate taxes. You may not think it applies to you, but if you do the bookkeeping for or are a member of a housing cooperative, you may find that it does. This needs to be issued to housing co-op members for their allocated portion of mortgage interest and real estate taxes paid by the cooperative, so they can deduct them on their personal tax return, Form 1040, Schedule A. If not e-filing, you can use the IRS’s fill-in pdf Copy B for the recipient copy, but for the version that goes to the IRS, you have to order an official form with special scannable ink — they’re free, but they take a while to be mailed, so fill out your request early. Make sure to mark the year you are filing for, not the current year — an easy mistake to make.
Frequently Asked Questions
What do I do if the vendor will not give me their Tax ID Number, which I need to file the 1099?
First off, it’s the business’ responsibility to obtain this number. That’s why I recommend getting the W-9 from the vendor before giving them their first payment. But in the case where it’s 1099-time and you still don’t have that TIN for some reason, respectfully let the vendor know that not having their info will not prevent you from filing the 1099. It just means the IRS will receive it with “REFUSED” written in the field where the number should be (or if you use an e-filing program, you will check the box that the number is unavailable). This will almost always trigger an audit for both the business and the recipient, which no one wants. Presented with this information, I find that most non-compliant vendors are suddenly able to fill out that W-9 form after all.
Do I really have to send one to my landlord? They get angry when I bring it up.
If your landlord is not incorporated, yes, you do. If it makes them mad, then consider why… are they trying to avoid declaring it as taxable income? Is that the type of person you want to rent from?
What if you forgot to issue a 1099 to someone?
It’s never too late! Since the statute of limitations never starts if you don’t file a return, penalties and interest can continue to accrue forever. If you noticed that you forgot to file a 1099, even for a prior year, reach out to the recipient in question and make sure they declared and paid taxes on the income you inadvertently forgot to remind them about — and hopefully they have. In this case, no amended return will be required on their end, and the form’s arrival will not come as an unwelcome surprise. If not, then that’s a bigger concern. It is the responsibility of each recipient of income to declare it on their return, regardless of having received the 1099. Not getting the form does not exempt a taxpayer from declaring the income they earned. So, the business owner needs to evaluate the risk involved to their company in knowingly refusing to comply with tax law, versus the recipient’s desire to evade taxes.
What do you do if you receive a 1099 that is incorrect or unnecessary?
If you receive a 1099 that has incorrect information on it, simply reach out to the issuer to ask for a corrected 1099. Do this as soon as possible, as it will help them to fix it before it is submitted to the IRS.
If they will not correct the total, then declare the full amount on your tax return, but “back out” the incorrect amount as a negative, with an explanation to the IRS for why this amount was inaccurate. If you receive an audit notice, provide the IRS with the documentation showing why your calculation is correct, and the support showing you reached out to the issuer when you realized the form was not right.
If you should not have received a 1099 at all, follow the same advice as above. A good example of this would be if you received a 1099-K for credit card payments, but also received a 1099-NEC from the company that paid you (this is quite common… it is extremely challenging in most bookkeeping software to distinguish how a bill was paid in most reports). In this case, if the customer will not void the 1099 form for some reason, simply declare the full amount on your business’ tax return and “back out” the amount that was double-issued, with the explanation that it was already declared in income via 1099-K or some similar wording.
However, if the reason you should not have received the 1099 was that you are taxed as a corporation, and you’ve already declared this income on your tax return, then you can ignore the form — it will have no effect on anything and was just a waste of time on the part of the issuer.
How do I run the 1099 report in QuickBooks? Won’t it tell me who needs a form from my company?
Most bookkeeping professionals don’t use the 1099 report that QuickBooks generates — it’s too prone to user error when setting up the vendors, accounts, and dollar-thresholds. Instead we use a program like Keeper to help us identify potential 1099 vendors and transactions, or in QuickBooks, we run the detail of the cash accounts and filter by transaction type – Check, Expense, Bill Payment… then sort by Name. The problem may be that there is not a name in there, or it is not a Vendor Name: another great reason to make sure you’re setting up bank rules and being careful about data entry to include vendor information on all transactions.
How does PayPal work?
Oh my goodness, is this ever complicated.
If you pay a business using your personal bank or Paypal account, or pay through “Friends & Family” PayPal you do need to send a 1099 (if over $600), because PayPal thinks this was a personal transaction — because, as I mentioned at the top of this post, personal transactions do not require 1099 forms. If you had used “Business” PayPal, then PayPal would send the 1099-K and there would be no reason to issue a 1099-NEC.
A colleague of mine recently called PayPal support about this and here was their response: If the transaction detail says “money sent”, those qualify as Friends & Family transactions. However, if the transaction says “invoice paid” or “payment”, then it is a business payment — even if it’s within a personal Paypal account.
What about Venmo?
According to Venmo’s term of service, using it for business is a violation, and they can seize whatever money you have sitting in your Venmo account if they catch you using it for business.
However, we know sometimes this is the best way to collect money from folks, or that customers will send you Venmo funds without thinking about it, or that you’ll do the same with your vendors.
Venmo is considered a “peer-to-peer transfer service”, and not a third-party network. Therefore, treat these like cash payments from a business and send a 1099 form to your vendor.
(Side note: Venmo is starting to accept applications from a number of businesses for a new “Business Venmo”, but it’s brand new and very limited. Be careful with this. The problem with Venmo, PayPal, Bento, and other similar companies like that is that they don’t act like they’re banks — and their staff doesn’t realize that banking is actually the primary function of the company they work for — they don’t get the same kind of intensive training that bankers do. I recommend avoiding Venmo for business payments as much as possible.)
The short version here is that not all states have the same rules. Some allow the IRS filing of certain information returns to substitute for state filing requirements, and some don’t. Some require e-filing and some allow physical mailings. Many states participate in the Combined Federal/State Filing Program. The IRS will automatically forward 1099 information to participating states, eliminating the need to file separately with these states.
So please, do your homework when it comes to state filings.
Where can I find more info on due dates, penalties, and real-life scenarios?
And as I mentioned earlier, yet another trusted colleague, Jennifer Dymond saw the need for a resource that details which payment methods are included on a 1099-K versus which ones you must issue 1099-NEC or 1099-MISC for yourself, and created 1099problems.io to help navigate these complexities. It’s updated regularly, as the proliferation of non-traditional payment methods continues. The first 1,099 people to subscribe using code DANCING1099 will receive 10% off their first order (offer expires March 31, 2024).
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
I wrote a fabulously comprehensive article for MSN back in March about the various types of IRS transcripts, what they’re for, why you’d use one versus another, and how to download them. Some of my finest work, if you ask me… but today you don’t care about that. You just need to hurry up and file your tax return by Monday, October 16th, and you can’t find any of the paperwork you carefully saved to your Mac desktop, only to have it be deleted during an update. (Yes, this is a thing. I’ve had it happen to two clients already.)
Whatever the reason for not being able to find your tax documents, you still have to get that return filed by Monday. Lucky for you, most of these documents are listed on what is called a “wage and income transcript”. The beauty of a wage and income transcript is that every one of those documents sent to you – they’re called “information returns” – is also sent to the IRS, with your social security number as a unique identifier. If you download this list of documents from the IRS, you get a summary of everything filed on your behalf.
Can’t find some of your W-2s from working several jobs?
Not sure whether your freelance gig issued a 1099-NEC? Or maybe you lost track of countless different contract work payments?
You’re pretty sure you have an old dividend- or interest-bearing account given to you by your grandparents but can’t ever find the form they mailed?
Do you pay student loan interest, tuition, or mortgage interest and you can’t find the forms because you moved during the year?
Though it takes the IRS a few months to post all these to your transcript (or longer, if the issuing company filed an extension), by this point in the season, everything should be there, and you’ll be able to prepare your tax return after all — even if you lost the originals that came in the mail or can’t figure out where you saved the PDFs.
And the best news where downloading a transcript is concerned? All you need is a photo ID, a mobile phone with a camera, an email address, and an Internet connection.
Keep in mind that the IRS will not email you a transcript; you must go online and create or log in to your account and download it. There are email scams out there that entice folks to click on a link or attachment with the promise of an IRS Online transcript – don’t fall prey.
“How Can I Download My IRS Transcript?”
1. From the IRS website, you’ll need to create an ID.me account. (This is the most involved of the steps, but thankfully you only have to do it once; moving forward, you’ll simply sign into the same account each time.) The ID.me website uses facial recognition to confirm your identity, so you’ll need your phone to take a selfie.
If you need help creating your ID.me account, the ID.me Help Center spells out the process very clearly. You can also watch this video or review these written instructions if you want to review the process first.
2. Once your account is created, log in, go to the IRS’s Get Transcript page and click the “Get Transcript Online” button.
3. Select the reason you need a transcript (it’s fine to just select “Other”).
4. Leave the Customer File Number blank and click “Go.” The screen will display all four (or five, if you have non-filing years) transcript options and the available years.
5. Under Wage & Income Transcript, select the tax-filing year.
6. After you select your transcript, like magic, a PDF will pop up in a new tab of your browser with all the information you need. (Or it will say “No record of return filed,” if nothing has posted yet.)
7. Print the file to PDF and save it somewhere safe, along with the rest of your tax season documents.
As explained above, your wage and income transcript will list all forms W-2, 1099, 1098, and 5498 that have been processed by the IRS so far for the tax year in question.
For most taxpayers, that’s all you need. But some people also can’t remember how much they paid in estimated taxes, or if they took last year’s refund and credited it forward, or they need to review last year’s return to jog their memory about this-or-that. If you’re one of those folks — no worries, I got you covered: but you need to read the longer version of this post that I shared back in March.
No need to panic — you got this. Now go file that tax return on time… for 2023, the extension deadline is Monday, October 16th, by midnight in your time zone. Yes, submitting your taxes is nerve-wracking, but it’s way better than the alternative, and with a handy list from the IRS of all your documents in one place, you’re one step ahead of most of the other taxpayers who haven’t filed yet!
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
We received a few frantic calls and emails in the past month from clients who opened their mail to find a penalty notice from the IRS for their 2022 Form 8955-SSA — some for tens of thousands of dollars.
As background, Form 8955-SSA, also known as the “Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits,” is an report that retirement plan sponsors (the entity that established the plan for a company and its employees — usually the employer itself, or a union) must file with the IRS to report information about certain participants (typically former employees) who have vested benefits that have been deferred according to the plan. It’s a required annual filing with the IRS for those who file Form 5500 and has the same filing deadline (July 31, 2023 for 2022 plans — October 15, 2023 on extension).
But most businesses contract this work out to a plan administrator, a service provider that has expertise in managing 401k plans. So you can only imagine how terrifying it must have been for a bunch of business owners to get these notices — meaning that presumably, their trusted outsourcing agency was not doing their job. (Or… let’s be honest — more likely, very few of the small businesses had any clue what the notice was for, apart from the fact that a-it was from the IRS, b-said they’d done something wrong, and c-they owed money. Scary stuff.)
Thankfully, it turns out that these notices were the result of an IRS glitch in the program that receives and processes these forms. The IRS acknowledged the error, fixed the issue, and updated its records to “reflect the accurate filing status of the affected plan sponsors”.
If you received a CP 283-C penalty notice dated before September 1, 2023, and you are sure that you filed your 2022 Form 8955-SSA on time and completely, you do not need to take any action. You can ignore the notice and rest assured that your filing is in good order. The IRS will not impose any penalties or interest on your account.
However, if you want to verify your filing status, you have a couple options. 1) First off, contact your plan administrator or service provider for confirmation of your filing. 2) You can also request a transcript of your filing from the IRS to double-check the assurance of your provider.
The IRS released a bulletin addressing the mistake and asked readers to contact them at 877-829-5500 with any questions.
At retirement age, the Social Security Administration informs affected individuals that they may be eligible for benefits under previous employers’ retirement plans based on information reported to the IRS on Form 8955-A, explained Allison Wielobob, Chief Legal Officer of the American Retirement Association, so it’s essential that this information is filed accurately and timely.
Take a deep breath. We all make mistakes. Even the IRS.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
I used to find it annoying when a client would forward me an article about a tax deduction or credit, to make sure I would take it on their tax return. But even though I take approximately 70 credit hours of continuing education each year (almost twice the requirement for Illinois CPAs), every once-in-a-while a new tax law falls between the cracks, or I might not realize a given client is suddenly eligible for an old one. So, while 99% of these shares are “old news”, it’s worth avoiding the eye roll and taking a look just in case. Out with the ego, in with the knowledge.
To that end, when you do share something with your tax preparer, I beg you to phrase it in respectful language that recognizes they are experts in their field. Examples: “I’m sure you already know about this but just wanted to play it safe,” or “I read about this new tax law and am constantly amazed at how much y’all have to keep up with; any chance this applies to my situation?”
There are five tax benefits I’ve noticed — in my interactions with colleagues at conferences, in webinar chat, or in our online communities — that seem to keep flying under the radar. Most likely the tax preparer is expecting the bookkeeper or taxpayer to bring it up if one of these situations exists, but they may not know it’s significant, and may forget to note it in the books or tax organizer. So, to make sure we’re all on the same page, here are a few choice tax benefits that are often overlooked.
Credit for Small Employer Retirement Plan Startup Costs
Credit for Small Employer Retirement Plan Startup Costs — SECURE 2.0 gets most of the airtime these days, but back in late 2019, the original version of this law passed, making it easier for small business owners to set up “safe harbor” retirement plans that are less expensive and easier to administer, and made them accessible to a wider range of employees. Although many of these benefits were modified and expanded upon with SECURE 2.0, the new rules didn’t take effect until 2023. But that shouldn’t stop you (or your preparer) from taking a look at the benefits in place in 2022. For starters, Form 8881, Credit for Small Employer Pension Plan Startup Costs provides for a maximum tax credit of up to $500 per year for startup costs, and another $500 per year to employers who create a 401(k) or SIMPLE IRA plan with automatic enrollment. This benefit is a win-win for employers and employees, especially when the employee additionally qualifies for the retirement savers’ credit.
Employer Credit for Paid Family and Medical Leave — Effective starting 2018, the Section 45S Employer Credit for Paid Family and Medical Leave is designed to cover up to 25% of the cost to employers of providing paid family and medical leave to their staff. The FMLA credit is claimed on Form 8994, Employer Credit for Paid Family and Medical Leave. To qualify, employers must have a written policy providing all eligible employees access to at least two weeks of paid family and medical leave annually, paid at 50% or more of normal wages (yes, short-term disability policies often count).
Policies must also include leave that covers one or more of the following: – Birth of a child – Adoption or fostering of a child – Care for a spouse or family member with a serious health condition – Employee’s own serious health condition – Spouses and family member of certain active military members
Employers can claim the credit for up to 12 weeks of paid leave benefits. It’s available through 2025 and the IRS has an FAQ on it that’s chock-full of details.
Restaurant Meal 100% Deduction — For 2021 and 2022 only, businesses can deduct the full cost of business-related food and beverages purchased from a restaurant; the limit is usually 50% of the meal, so this can be quite a savings. For our own clients, we’re simply exporting the entire “Meals” category from their financial software and reviewing all payees, sorting out the ones that are not restaurants… yet another benefit for small business owners who heed our cry to “please add payees to all transactions”.
Per the IRS, to qualify for the enhanced deduction: – The business owner or an employee of the business must be present when food or beverages are provided. – Meals must be from restaurants, which includes businesses that prepare and sell food or beverages to retail customers for immediate on-premises or off-premises consumption. – Payment or billing for the food and beverages occurs after December 31, 2020, and before January 1, 2023. – The expense cannot be lavish or extravagant. – Grocery stores, convenience stores and other businesses that mostly sell pre-packaged goods not for immediate consumption, do not qualify as restaurants.
Self-Employed Health Insurance Deduction — Now, this may sound obvious, since almost everyone knows that self-employed people are generally allowed to deduct their health insurance premiums for themselves, their spouses, and their dependents (and in some cases, non-dependent children). Yet we often see this benefit overlooked on tax returns, especially when S-Corp shareholders pay for their insurance through work. There are special and complex rules regarding how this health insurance deduction is claimed, which I suspect is why it is often missed (or sometimes duplicated). It’s important to understand that this is not a business deduction; neither do you have to itemize to take it. The deduction is claimed as a reduction of taxable income, and applies only to income taxes, not to self-employment taxes. It also needs to be subtracted from Section 199A Qualified Business Income before calculating the QBI Deduction, and there are complex issues when it interacts with the Premium Tax Credit (see below), so keep an eye out for these potential issues when claiming this important tax benefit.
Premium Tax Credit — This one is often overlooked on tax returns in more than one direction… often the client forgets to provide Form 1095-A (Marketplace Health Insurance) to their preparer, which shows the advance premium tax credit, and therefore any increase or decrease in the credit based on the current year’s income is missed. How does this happen? Well, the credit is based on the prior tax year’s income, but “reconciled” on the tax return against the current tax year’s income — therefore, if the taxpayer had a good year, they may lose most or all of their credit. By contrast, in more difficult times, they may find out on the return that they’re entitled to more of a credit than they received. Not everyone enrolled on the Marketplace is eligible for a credit, so it’s easy to miss in the long list of tax organizer questions if the client doesn’t know to ask or to submit the form.
Per the IRS: If you benefit from advance payments of the premium tax credit, it is important to report life changes to the Marketplace as they happen throughout the year. Certain changes to your household, income or family size may affect the amount of your premium tax credit. These changes can alter your tax refund, or cause you to owe tax. Reporting these changes promptly will help you get the proper type and amount of financial assistance. For more information, see Claiming the Credit and Reconciling Advance Credit Payments.
To be fair to tax preparers everywhere, there is far more in the Internal Revenue Code (IRC) than any one person could ever know, which is part of why CPAs are required in most states to obtain more continuing education credits than almost any other professional designation. (Though keep in mind — there is no requirement that a tax preparer be a CPA, or even an EA. See here for my guide to finding a qualified tax preparer in your area.) The past five years have seen unprecedented increases in tax law complexity, and quite frankly — it’s hard to keep it all straight. So if you’re concerned your tax preparer is missing something, please approach the matter with respect and deference, and do not judge too harshly if they happen to have missed something. Just be glad you read this article and caught it in time! (And if you didn’t catch it in time, ask them about filing an amendment.)
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
It’s that time again… Tax Day is upon us and millions of taxpayers will need to have their returns extended for various reasons. What does this mean? The AICPA has released a “Tax Extension FAQ” for CPA members to share with their clients.
What does filing an “extension” do?
• An extension is a form filed with the IRS to request additional time to file your federal tax return. This extends the due date for submitting your individual return to October 15. • In some states, filing an extension with the IRS will automatically extend the time to complete a state income tax return. My note: In others, you must file a state extension. In still others, you must make a payment as your extension. • Filing an extension grants you additional time to submit your complete and accurate return, but you still need to estimate whether you will owe any taxes and pay that estimated balance by the original due date. • Extending your return allows you and your CPA more time to prepare your tax return to ensure the filing of an accurate tax return. In many cases, you may still be waiting for additional information (e.g., Schedules K-1, corrected Forms 1099, etc.) to complete your return.
Why does my CPA suggest we extend my tax return?
• If your CPA has recommended that you file an extension, it may be due to many reasons, such as: – The volume of data or complexity of certain transactions (e.g., sale of a rental property) on your return requires additional time. – The amount of time remaining in filing season is limited for the CPA to complete client returns by the due date* due to late-arriving information. – My note: Your small business accounting file needs to be tied out to source documents and all adjustments booked before we will finalize a return, and there may be delays in this process due to a variety of issues. • Many CPAs have a “cutoff” or deadline for clients submitting their tax information so they can plan their workload to ensure all client returns and extensions are completed by the due date. • Your CPA may suggest filing an extension if there are aspects of your return affected by pending guidance or legislation.
Am I more likely to be audited if I extend?
• Extending will NOT increase your likelihood of being audited by the IRS. • It is better to file an extension than to file a return that is incomplete or that you have not had time to carefully review before signing.
What are the primary benefits of extending my tax return?
• It provides for additional time to file returns without penalty when you are waiting for missing information or tax documents (such as corrected Forms 1099). Just remember that an extension provides additional time to file, but not additional time to pay. Penalties may be assessed if sufficient payment is not remitted with the extension. • You may qualify for additional retirement planning opportunities or additional time to fund certain types of retirement plans (e.g., SEP IRA). • It is often less expensive (and easier) to file an extension rather than rushing and possibly needing to amend your return later.
Should I do anything differently if I am filing an extension or “going on extension?”
• No, you still should give your CPA whatever information you have as early as possible or as soon as it becomes available. • Expect to pay any anticipated taxes owed by the due date.* You still need to submit all available tax information to your CPA promptly so they can determine if you will have a balance due or if you can expect a refund. • If you are required to make quarterly estimated tax payments, individual first quarter estimated tax payments are due on the same day as annual taxes. Your CPA may recommend that you pay the balance due for last year and your first quarter estimated tax payment for this year with your extension. • If you are anticipating a large refund, your CPA will likely try to get your extended return completed as soon as possible once all tax information is available. Your CPA may also want to discuss tax planning opportunities with you so that, in future years, you don’t give the IRS an interest-free loan.
My note: I’d like to add that we take filing extensions for our clients very seriously. We collect as much information as we possibly can about the year’s taxable income and deductions, extrapolate based on information from the prior year, and build a complete tax return — filling in estimates where needed. This way, we get as accurate a picture as we can so as to project how much might be owed to the tax agencies. We do our best, although it’s not perfect, and as a result, much more work is involved in putting together an extension than most folks might think.
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There are multiple options for paying personal quarterly estimated taxes. You can: have your tax preparer create vouchers that you then print and mail with a check; prepare your own vouchers and do the same; or pay online.
Since March 2020, the IRS, USPS, and state revenue agencies have had so many challenges with mailed paper checks and vouchers that we strongly encourage everyone to make all tax payments online.
If you want to pay your federal estimated taxes online, the easiest way is to use IRS Direct Pay. Paying online offers confirmation that the payment made it to the agency, reducing the chance of issues down the road, especially if the check is lost in the mail or routed incorrectly in the processing department. It also allows taxpayers to be very clear about what type of tax and tax period are being submitted, again eliminating confusion on the part of the agency and preventing future problems.
Pro Tip: if you have questions about estimated taxes — what they are, whether or not you need to pay them, and how to calculate them — I recommend this great YouTube primer by my colleague, Hannah Smolinski of Clara CFO. It can easily be as much as 20-30% of each freelance check you take home, so get on top of this now… don’t wait until the money’s already been spent.
The due dates for estimated quarterly taxes are approximately: 1Q: April 15 2Q: June 15 3Q: September 15 4Q: January 15 — however for state taxes, especially for cash-basis filers and those in states with PTE tax, we recommend making the final payment by December 31st.
If you are paying online, I recommend making payments one day before the due dates, as sometimes it takes a day for the agencies’ systems to process payments due to overnight automated workflows. The funds are usually pulled from your bank account the same day or one day later, so there is very little wiggle room. This organization will actually send you reminder emails for each payment!
The great news is that you do not need to have an account with the IRS in order to make payments using Direct Pay.
Internal Revenue Service (IRS)
For the IRS, once you get to the Direct Pay site, select the following options (noted in the screen shot below): 1) the reason for the payment; 2) the form you would be mailing in if you weren’t doing this online; and 3) the year to which the payment should apply. For example, for 1st-quarter 2023 personal estimated taxes, you’d select the following:
IRS “Direct Pay” Step 1 of 5.
Pro Tip: you don’t have to wait until the due date for each quarter to make quarterly estimated tax payments! You can pay as early as you like. And if cash flow is a challenge, a great hack is to take the total tax payments required for the year and make monthly or bi-weekly — or even weekly — payments online. (Another trick is to increase tax withholding from your other sources of income, but not everyone has a W-2 job, and not all retirement companies will do that.)
There are many possible reasons for payment — such as extensions, balances due on a filed return, installment payments, amended returns, and so on. The IRS offers a list in their dropdown. For the purposes of this article, we’re focusing on quarterly estimated tax payments.
IRS “Direct Pay” List of Payment Reasons.
It’s extremely important that you select the correct year for payment. The IRS will levy late penalties and interest if you pick the wrong year, and the amount of time and effort that goes into contacting them and getting payments reapplied to the correct year will often cost more for your tax preparer’s time than filing your return in the first place. So keep in mind that the current year is usually the one you want for estimated tax payments, and a prior year is generally for extensions, balances due, installment payments, amended returns, and most other options. Selecting the correct year and type will ensure that these payments show up properly on your transcript.
Once you click the Continue button, you’ll be prompted to confirm the type of form and the period.
IRS Direct Pay Estimated Tax Payment and year confirmation.
At that point the system will ask you to enter a bunch of info to confirm your identity. The basic idea is to provide them name and address data from a prior-year tax return so that… well, so they know it’s really you. Since IRS Direct Pay works without a login, you will need to verify your identity each time you revisit it. Make sure you enter your name and address exactly as they appear on the tax return you are using for verification. If your name or address have changed, try selecting an earlier year for verification and enter the information from that year. This information does not need to be for the same tax year on which you are making your payment. It can be from as far back as 5 to 6 years ago depending on the time of year.
IRS “Direct Pay” Step 2 of 5, part one.IRS “Direct Pay” Step 2 of 5, part two.
Once you enter all this information and hit the “Continue” button, it will take you to a screen to enter the payment information — amount, bank account, and email address for confirmation. If you are having issues with the system accepting your information, double-check that you’re entering your name, SSN, date of birth and address exactly as it was on the tax return for the year you selected. The IRS has a Direct Pay troubleshooting page if you have more questions.
IRS “Direct Pay” Step 3 of 5, part one.IRS “Direct Pay” Step 3 of 5, part two.
Next, you’ll need to agree to the disclosure pop-up.
IRS “Direct Pay” disclosure pop-up.
In the final step, you will need to review all the information you have entered, provide an electronic signature including social security number or ITIN, and check the box to authorize the debit. Click Submit and you are done!
Please make sure to note how much you paid to each agency and on which dates — and let your tax preparer know this information as well. Securely uploading copies of the final confirmation screen to your tax preparer or bookkeeper is a great practice, so they can easily store the info in your file.
And if you use QuickBooks or another bookkeeping program, please make sure to enter the quarter, year, and “estimated tax” so that you or your bookkeeper or accountant or tax preparer can make sure it’s applied to the correct year, and for the right type of tax.
Many self-employed folks get surprised at tax-time with huge balances due, penalties and interest. Don’t let yourself fall into that trap — make regular payments online and taxes will be a breeze next year.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
Unless you’re an accountant, you’ve probably never even heard of an IRS account transcript—but it’s the best hack there is for getting an accurate snapshot of your income, deductions, tax payments, tax filings, and account activity records.
Here’s how it works: the IRS receives a copy of every single tax form filed by you – or “on” you (by, say, an employer or brokerage firm). If you’re paralyzed with fear of filing your tax return because you might be missing documents, you can easily find them by accessing your IRS transcript. It’s such a helpful (and free) tool that I urge all of my clients, family and friends to take advantage of the option – and the Taxpayer Advocate Service does, too.
There are five different types of IRS transcripts, but for this hack we’re focusing on three of them: the wage and income transcript, the account transcript, and the prior-year record of account transcript.
“Why Should I Download My IRS Transcript?”
First, it’s important to note that there is more than one type of transcript, and each meets a different need… a different “why should I”. The most important one for filing your taxes is called the “wage and income transcript”:
Can’t find some of your W-2s from working several jobs?
Not sure whether your freelance gig issued a 1099-NEC? Or maybe you lost track of countless different contract work payments?
You’re pretty sure you have an old dividend- or interest-bearing account given to you by your grandparents but can’t ever find the form they mailed?
Do you pay student loan interest, tuition, or mortgage interest and you can’t find the forms because you moved during the year?
The beauty of a wage and income transcript is that every one of those documents sent to you – they’re called “information returns” – is also sent to the IRS, with your social security number as a unique identifier. So by downloading this list of documents from the IRS, you get a summary of everything filed on your behalf.
However, it takes time for the IRS to wade through all these filings and post them to your account. Sometimes they’re not all posted until a month or two after Tax Day. If nothing has posted yet, it will simply say “No record of return filed.”
But if you’re filing taxes for a prior-year or on extension, it’s a total gold mine. Our firm has even helped clients catch up on tax returns from years’ past by recreating their history based on these transcripts. (That said, I recommend downloading it even if you’re filling on time, just to verify that you’re not missing anything in your pile of tax forms.)
The second most-important transcript during tax-filing season is the ”account transcript”. This lists information on payments and credits posted to your account throughout the year, and we actually require our own clients to submit it to us with their tax organizer annually:
And lastly, there’s the “record of account transcript”, which combines a “return transcript” of a prior-year tax return with any activity posted since then.
Do you need to review last year’s return to make sure you’re not forgetting something important this year?
Are you being asked to verify your income when applying for a mortgage or financial aid, SBA loan, social services or checking on a prior-year tax refund?
The best news where downloading any transcript is concerned? All you need is a photo ID, a mobile phone with a camera, an email address, and an Internet connection.
Keep in mind that the IRS will not email you a transcript; you must go online and create or log in to your account and download it. There are email scams out there that entice folks to click on a link or attachment with the promise of an IRS Online transcript – don’t fall prey.
“How Can I Download My IRS Transcript?”
1. From the IRS website, you’ll need to create an ID.me account. (This is the most involved of the steps, but thankfully you only have to do it once; moving forward, you’ll simply sign into the same account each time.) The ID.me website uses facial recognition to confirm your identity, so you’ll need your phone to take a selfie.
If you need help creating your ID.me account, the ID.me Help Center spells out the process very clearly. You can also watch this video or review these written instructions if you want to review the process first.
2. Once your account is created, log in, go to the IRS’s Get Transcript page and click the “Get Transcript Online” button.
3. Select the reason you need a transcript (it’s fine to just select “Other”).
4. Leave the Customer File Number blank and click “Go.” The screen will display all four (or five, if you have non-filing years) transcript options and the available years.
5. Under Wage & Income Transcript, select the tax-filing year.
6. After you select your transcript, like magic, a PDF will pop up in a new tab of your browser with all the information you need. (Or it will say “No record of return filed,” if nothing has posted yet.)
7. Print the file to PDF and save it somewhere safe, along with the rest of your tax season documents.
As explained above, your wage and income transcript will list all forms W-2, 1099, 1098, and 5498 that have been processed by the IRS so far for the tax year in question.
8. Then go back to the open “Get Transcript” tab and click the tax year under Account Transcript, which will list all payments and credits on your account.
9. Lastly, go to the Record of Account Transcript section and click the prior-year link. It will list all account activity for the tax year in question, followed by every single field from your tax return.
(And if you want to get deep into the weeds, NASFAA has an amazing “Tax Transcript Decoder” that compares the fields on a tax return to the fields on a tax return transcript, and Saving To Invest had fun with highlighters when creating a legend for each row on an account transcript.)
Done! Let the tax return preparation begin!
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
The past three years have been challenging in so many ways, to so many people — but as a tax preparer, I can confidently say that the inability for the IRS to provide its usual level of customer service has been among the most impactful. Luckily, recent Congressional funding to make up for years of inadequate budgets, combined with Treasury Secretary Yellen’s direction that IRS priorities should include clearing the backlog of unprocessed tax returns and improving customer service, seem to be making a difference.
Pre-pandemic, the IRS offered all sorts of taxpayer assistance options, but the inability to offer in-person services, as well as the intense strain that government financial relief programs placed on the already-stretched agency, made it impossible to offer even the most basic of support programs. The good news is that some of the Taxpayer Assistance Centers are reopening to the public, one Saturday each month for walk-in help without an appointment.
On March 11, April 8 and May 13, from 9 am to 4 pm, certain IRS Taxpayer Assistance Centers will offer in-person service and assistance to meet taxpayers’ needs. The IRS recommends that you come prepared and bring documents such as photo ID, Social Security cards, IRS notices received, proof of bank account information, and so on. Professional foreign language interpretation will be available through an over-the-phone translation service. For a list of addresses, visit the IRS’s website announcement and then click the plus-sign to the left of your date of choice. Scroll down to your state, and all the addresses of the participating offices will be listed.
The IRS also notes various options for obtaining free tax preparation services locally:
Any individual or family earning $73,000 or less in 2022 can use tax software through IRS Free File at no cost. There are products in English and Spanish.
MilTax, a Department of Defense program, offers free return preparation software and electronic filing for federal tax returns and up to three state income tax returns. It’s available for all military members, and some veterans, with no income limit.
The IRS has also published a series of “Tax Time Guide” news releases designed as a resource to help taxpayers file an accurate tax return. And US News & World Report recently published a list of free and low-cost tax preparation resources. It’s not a magic wand, but after a few rough years, you’re no longer alone when it comes to navigating tax season.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
January 23, 2023 — Per IRS 2023-11, following a successful opening of its systems today, the IRS is now accepting and processing 2022 tax returns; taxpayers have until April 18 to file their taxes this year.
According to Acting Commissioner Doug O’Donnell, taxpayers can count on IRS delivering improved service this filing season. As part of the August passage of the Inflation Reduction Act, the IRS has more than 5,000 new telephone assistors and added more in-person staff to help taxpayers.
Taxpayers who electronically file a tax return with no issues and choose direct deposit should still receive their refund within 21 days of the date they file – similar to previous years. Due to tax law changes such as the expiration of the Advance Child Tax Credit and Recovery Rebate Credit this year to claim pandemic-related stimulus payments, many taxpayers may find their refunds somewhat lower this year.
The State of Illinois also opened its tax season today. In a press release, the IDOR Director, David Harris, highlighted the improved and enhanced MyTax Illinois system.
In addition to being able to file Form IL-1040 for free through MyTax Illinois, individuals may also use the site to make payments, respond to department inquiries, and check the status of their refunds using the Where’s My Refund? link.
MyTaxIllinois also allows taxpayers to look up Illinois-Personal Identification Numbers (IL-PINs), which are eight-digit numbers assigned by the department and used as signatures when e-filing returns. Amounts of any estimated tax payments can also be viewed and (when necessary), amounts reported on Forms 1099-G and 1098-F can also be found on the site.
Back to the IRS… in today’s news release, they also shared their tips for a smooth filing season:
Fastest refunds by e-filing, avoiding paper returns: To avoid refund delays, IRS encourages taxpayers to file their tax return electronically with direct deposit instead of submitting a paper tax return. Taxpayers may use IRS Free File on IRS.gov, other tax software or a trusted tax professional. Members of the armed forces and qualifying veterans can file their federal tax return and up to three state tax returns for free electronically using MilTax, a Department of Defense program.
Avoid delays; file an accurate tax return: Taxpayers should make sure they’re ready to file an accurate and complete tax return. This can help avoid processing delays, extensive refund delays and later IRS notices.
Earned Income Tax Credit or Additional Child Tax Credit refunds: Taxpayers may file their returns beginning Jan. 23, but the IRS cannot issue refunds involving the Earned Income Tax Credit or Additional Child Tax Credit before mid-February. The law provides the extra time to help the IRS prevent fraudulent refunds. “Where’s My Refund?” on IRS.gov should show an updated status by Feb. 18 for most EITC and ACTC filers. The IRS expects most of these refunds to be available in taxpayer bank accounts or debit cards by Feb. 28 if people chose direct deposit and there are no other issues with their tax return.
Avoid phone delays; online resources best option for help: IRS.gov is the quickest and easiest option for help. IRS assisted phone lines continue to receive a high volume of calls. To avoid delays, check IRS.gov first for refund information and answers to tax questions. Setting up an Online Account on IRS.gov can also help taxpayers get information quickly. IRS Online Account was recently expanded to allow more people to gain access. The Interactive Tax Assistant can also help taxpayers get answers to many tax questions online at any time.
Other free options for help: IRS Free File is available to any person or family who earned $73,000 or less in 2022. For taxpayers who are comfortable completing their own tax forms, Free File Fillable Forms may be a good option. MilTax is a free tax resource available to the military community, and it’s offered through the Department of Defense. Qualified taxpayers can also find free one-on-one tax preparation help nationwide through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs.
2021 tax returns still being processed: Taxpayers can check Where’s My Amended Return? to find out the status of their tax year 2021 Form 1040-X and can still file their 2022 tax returns even if their 2021 tax returns haven’t been processed. Visit the IRS Operations page for more information on what to expect.
April 18 tax deadline: This year, the filing deadline is April 18 for most taxpayers, but automatic six-month extensions of time to file are available for anyone for free. See Extension of Time to File Your Tax Return for instructions. Taxpayers should be aware that filing Form 4868 only extends the time to file tax returns. Those who owe taxes should still pay by April 18 to avoid late payment penalties.
Let the filings begin!
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
