2021 Advanced Child Tax Credit

The 2021 Advanced Child Tax Credit is presented on the Tax E Man Blog. Tax E Man, along with the website http://www.PatTax.net, are designed to be year-round resources for your tax consultation, preparation and representation needs. The resources are provided by Baldwin, NY tax preparation and representation firm Pat Tax, Inc and its president Enrolled Agent Patrick White.

We stand ready to help resolve your specific consultation, preparation and representation concerns.

Advanced Child Tax Credit Payments

Important changes to the Child Tax Credit will help many families get advance payments of the credit starting this summer. The IRS will pay half the total credit amount in advance monthly payments beginning July 15. You will claim the other half when you file your 2021 income tax return. These changes apply to tax year 2021 only.

To qualify for advance Child Tax Credit payments, you and your spouse, if you filed a joint return, must have:

  • Filed a 2019 or 2020 tax return and claimed the Child Tax Credit on the return, or
  • Given the IRS your information in 2020 to receive the economic impact payment using the Non-Filers: Enter Payment Info Here tool, and
  • A main home in the United States for more than half the year (the 50 states and the District of Columbia) or file a joint return with a spouse who has a main home in the United States for more than half the year, and
  • A qualifying child who is under age 18 at the end of 2021 and who has a valid Social Security number, and
  • Made less than certain income limits.

The IRS will use information you provided to determine if you qualify and automatically enroll you for advance payments. You do not need to take any additional action to get advance payments.

Caution. The total amount of the advance Child Tax Credit payments that you receive during 2021 is based on the IRS’s estimate of your 2021Child Tax Credit, If the total advance payment is greater than the Child Tax Credit amount you are allowed to claim on your 2021 tax return, you may have to repay the excess amount on your 2021 tax return. You may have received an excess credit due to changes in your income, marital status, or number of qualifying children.

Repayment protection safe harbor. You may not have to repay some or all of any excess advance Child Tax Credit amount if the excess payment is caused by a change in the number of qualifying children and your income is below a specified amount for your filing status.

The maximum amount of repayment protection is $2,000 for each qualifying child that the IRS took into account when estimating your advance Child Tax Credit. You qualify for the maximum amount if your modified adjusted gross income (AGI) is at or below the following amounts based on the filing status for your 2021 income tax return.

  • $60,000 if you are married and filing a joint return or filing as a qualifying widow(er).
  • $50,000 if you are filing as head of household.
  • $40,000 if you are a single filer or married and filing a separate return.

Any accounting, business or tax advice contained in the Tax E Man Blog or PatTax.net, including attachments, links and enclosures are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

Tax News and Industry Updates-First Quarter 2020

2019 Tax Update

The Tax News and Industry Updates-First Quarter 2020 is presented on the Tax E Man Blog. Tax E Man, along with the website http://www.PatTax.net, are designed to be year-round resources for your tax consultation, preparation and representation needs. The resources are provided by Baldwin, NY tax preparation and representation firm Pat Tax, Inc and its president Enrolled Agent Patrick White.

Highlights in this issue include:

  • Further Consolidated Appropriations Act of 2020 which included extensions of expiring provisions
  • SECURE Act, included in the Further Consolidated Act, makes major changes to retirement plan rules.
  • Expansion of 529 Plans
  • Kiddie Tax
  • Disaster Tax Relief

Read Tax News and Industry Updates First Quarter 2020 Here

Taxpayers who may find the law changes of greatest benefit are

  • Taxpayers age 70 ½ or older
  • Taxpayers with retirement plans
  • Volunteer firefighters and emergency medical responders
  • Taxpayers with children who have unearned income
  • Taxpayers who have a casualty loss

Read Tax News and Industry Updates First Quarter 2020 Here

Any accounting, business or tax advice contained in the Tax E Man Blog or PatTax.net, including attachments, links and enclosures are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties. If desired, Pat Tax Inc would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

 

Newlyweds Tax Tips

The Tax E Man Blog, along with the website www.PatTax.net are designed to be year-round resources for your tax consultation, preparation and representation needs. The resources are provided by the Baldwin, NY tax preparation and representation firm Pat Tax, Inc and its president Enrolled Agent Patrick White.

We stand ready to help resolve your specific consultation, preparation and representation concerns.

 

Tips for Newlyweds

Updating your status from single to married may bring about some unanticipated changes, including changes relating to your taxes. While wedding planners don’t typically use an IRS checklist, here are a few things to keep in mind when filing your first tax return as a married couple.

As with any tax issue, contact your tax professional to help you navigate your own unique situation.

Read the entire article here 2019 Newlyweds Tax Tips

Notify the Social Security Administration (SSA)

If one of you has taken on a new name, report the change to the SSA. File Form SS-5, Application for a Social Security Card.

It is important that your name and Social Security Number match on your tax return. The IRS will match your information with records provided by the SSA and, if the records don’t match, any electronically filed return will be rejected and any paper filed return will be delayed until the error is corrected.

Avoid making a name change too close to tax season. While the SSA can process a name change in about two weeks, the delay in data-sharing between the SSA and the IRS can make any change near the end of the year problematic. In such situations, it may be advisable to file the tax return using your maiden name and change your name with the SSA after the return has been filed.

Form SS-5 is available on the SSAs website at http://www.ssa. gov, by calling 800-772-1213, or by visiting a local SSA office. A copy of your marriage certificate and driver’s license or passport will be required.

 Notify the IRS If You Move

The IRS will automatically update your new address upon filing your next tax return, but any notices the IRS sends in the meantime may not get to you. The U.S. Postal Service does not forward certain types of federal and certified IRS mail. IRS Form 8822, Change of Address, is the official way to update the IRS of your address change. Download Form 8822 from http://www.irs.gov or order it by calling 800-TAX-FORM (800-829-3676).


Notify the U.S. Postal Service

To ensure your mail, including mail from the IRS, is forwarded to your new address, you’ll need to notify the U.S. Postal Service. Submit a forwarding request online at http://www.usps.com or visit your local post office. Most post offices will not forward refund checks so be sure the IRS has your correct address. Using electronic direct deposit for refunds can prevent them from being delayed due to address mix-ups.

Read the entire article here 2019 Newlyweds Tax Tips

Any accounting, business or tax advice contained in the Tax E Man Blog or PatTax.net, including attachments, links and enclosures are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.If desired, Pat Tax Inc would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

Tax News and Industry Updates-July 1 2019

2019 Tax Update

Tax News and Industry Updates-July 1, 2019 Newsletter, is presented on the Tax E Man Blog. Tax E Man, along with the website www.PatTax.net are designed to be year-round resources for your tax consultation, preparation and representation needs. The resources are provided by the Baldwin, NY tax preparation and representation firm Pat Tax, Inc and its president Enrolled Agent Patrick White.

We stand ready to help resolve your specific consultation, preparation and representation concerns.

Tax News and Industry Updates Newsletter-July 1, 2019

Inside this issue of Tax News and Industry Updates Newsletter-July 1, 2019

  • HSA Inflation Adjustment Amounts-the IRS announced adjusted amounts for health savings amounts (HSAs) for 2020. These amounts are reflected in the chart linked here 2019 Tax News and Industry Updates.
  • Use 2018 Tax Return to get 2019 Withholding Correct-millions of taxpayers filed a 2018 tax return in the last few months, making now a prime time for everyone to consider whether their tax situation came out as they expected. If it didn’t, they can use their recently finished 2018 return and the IRS Withholding Calculator to do a Paycheck Checkup and adjust their withholding. Read 2019 Tax News and Industry Updates  here.
  • Draft Version of Form W-4 for 2020-the IRS has issued a draft version of the 2020 Form W-4, Employee’s Withholding Allowance Certificate, to be used to determine withholding for employees. A PDF of the draft can be downloaded by using the Draft Version of W-4 here. Read 2019 Tax News and Industry Updates here.
  • Taxation of State Income Tax Refunds-if a taxpayer receives a federal tax benefit from deducting state and local taxes, and in the following year the taxpayer receives a refund of all or a portion of those state taxes, a portion of the refund may be subject to federal income tax in the year the refund is received. Read 2019 Tax News and Industry Updates here.
  •  Strict Substantiation Requirements for Charitable Contributions. Read 2019 Tax News and Industry Updates here.

Any accounting, business or tax advice contained in the Tax E Man Blog or PatTax.net, including attachments, links and enclosures are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

 

Retirement and Other Savings Accounts-Tax Cuts and Jobs Act

Tax And Jobs Act Image

 

Retirement and Other Savings Accounts-Tax Cuts and Jobs Act , is presented on the Tax E Man Blog. Tax E Man, along with the website www.PatTax.com are designed to be year-round resources for your tax consultation, preparation and representation concerns. The resources are provided by the Baldwin, NY tax preparation and representation firm Pat Tax Inc and its President Enrolled Agent Patrick White.

Retirement and Other Savings Account-Tax Cuts and Jobs Act

 

The Tax Cuts and Jobs Act (TCJA) is the biggest tax law change in over 30 years and will have significant effects on tax planning and filing for individuals, families and businesses.

Among the changes made were those affecting certain retirement and savings accounts, such as Able and 529 accounts. Except where noted, the changes are efective for tax years 2018-2025.

The 2018 Tax Cuts and Jobs Act Retirement and Other Savings Accounts blog will focus on the following TCJA changes

  • IRA-Reconversion rules cannot be used to unwind a Roth conversion
  • Rollover Period of Plan Loan Offsets
  • Section 529 Qualified Tuition Plan (QTP)-expansion of distributions for public, private  or religious elementary or secondary school tuition expenses
  • Achieving a Better Life Experience (ABLE) Account-Ability to make tax-free roll over from 529 to ABLE

The link here 2018 Tax Cuts and Jobs Act Retirement and Other Savings Accounts will provide explanation and examples of the old law and the new law.
The goal of the Tax E Man Blog is to help you understand, take action-if necessary-and comply with your federal tax return requirements.
The information is not intended to replace or supersede IRS tax forms, instructions or other official guidance. The official IRS.gov website includes a Tax Reform page that highlights what you need to know about the tax law changes.

2018 Tax Cuts and Jobs Act Retirement and Other Savings Accounts

The first 2 Blogs in the series, 2018 New Tax Law and Tax Cuts and Jobs Act-Individuals can be accessed by clicking the links below. A link for IRS Publication 5307, Tax Reform Basics for Individuals and Families is also available.

2018 New Tax Law
Tax Cuts and Jobs Act-Individuals
IRS Publication 5307-Tax Reform Basics for Individuals and Families

Any accounting, business or tax advice contained in the Tax E Man Blog or PatTax.net, including attachments, links and enclosures are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

 

Getting Ready For Federal Tax Filing-The Tax Cuts and Jobs Act (TCJA)

Tax And Jobs Act Image

The Tax E Man Blog, along with our website http://www.PatTax.net, are designed to be year-round resources for your tax consultation, preparation and representation concerns. The resources are provided by the Baldwin, NY tax preparation and representation firm Pat Tax Inc and its President Enrolled Agent Patrick White.

Pat can be contacted at (347) 949-TAXE(8293) or email: PatTaxHelp@gmail.com with any questions or concerns.

Getting Ready For Federal Tax Filing-The Tax Cuts and Jobs Act (TCJA)

 

The Tax Cuts and Jobs Act (TCJA) is the biggest federal tax law change in over 30 years and will have signicant effects on tax planning and filing for individuals, families and businesses.

The Tax E Man Blog will cover some of the provisions of the TCJA, It will provide information for you, your family and your business to help you understand , take action-if necessary- and comply with your federal tax return requirements.

The Tax E Man Tax Cuts and Jobs Act Blog Series will include

The New Tax Law- An Overview
Tax Cuts and Jobs Act-Individuals
Tax Cuts and Jobs Act-Retirement and Other Savings Accounts
Tax Cuts and Jobs Act-New Business Income Deduction
Tax Cuts and Jobs Act Depreciation
Tax Cuts and Jobs Act-Excess Business Loss and Net Operating Loss (NOL)
Tax Cuts and Jobs Act-Employers
Tax Cuts and Jobs Act-Corporations

The information is not intended to replace or supersede IRS tax forms, instructions or other official guidance. The official IRS.gov website includes a Tax Reform page that highlights what you need to know about the tax law changes.

The first 2 Blogs in the series, The New Tax Law-An Overview and Tax Cuts and Jobs Act-Individuals can be accessed by clicking the links below. A link for IRS Publication 5307, Tax Reform Basics for Individuals and Families is also available.

 

2018 New Tax Law-An Overview

Tax Cuts and Jobs Act-Individuals

IRS Publication 5307-Tax Reform Basics for Individuals and Families

 

Any accounting, business or tax advice contained in the Tax E Man Blog or PatTax.net, including attachments, links and enclosures are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

 

Your Rights as a Taxpayer

The Tax E Man Blog, along with our website http://www.PatTax.net, are designed to be year-round resources for your tax consultation, preparation and representation concerns. The resources are provided by Pat Tax Inc and its President Enrolled Agent Patrick White.

Pat can be contacted at (347) 949-TAXE(8293) or email: PatTaxHelp@gmail.com with any questions or concerns.

 

Your Rights as a Taxpayer

 

As stated by the Internal Revenue Service, their mission is to

Provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

It was toward this end that the Taxpayer Bill of Rights were created by the IRS and incorporated into Publication 1. The Taxpayer Bill of Rights contain 10 provisions compiled by the Internal Revenue Service that “Take the multiple existing rights embedded in the tax code and groups them into 10 broad categories making them more visible and easier for taxpayers to find.”

 

Read Taxpayer Bill of Rights Here

 

The 10 Taxpayer Rights are

  1. The Right to Be Informed
  2. The Right to Quality Service
  3. The Right to Pay No More than the Correct Amount of Tax
  4. The Right to Challenge the IRS’s Position and be Heard
  5. The Right to Appeal an IRS Decision in an Independent Forum
  6. The Right to Finality
  7. The Right to Privacy
  8. The Right to Confidentiality
  9. The Right to Retain Representation
  10. The Right to a fair and Just Tax System

 

Read Taxpayer Bill of Rights Here

 

As stated in Right 9, taxpayers have “The Right to Retain Representation.” Enrolled Agent Patrick White, President of Pat Tax Inc, is empowered by the United States Department of the Treasury to represent taxpayers before the Internal Revenue Service in regard to tax matters. Pat can be contacted at (347) 949-TAXE(8293) or email: Pattaxhelp@gmail.com.

Any accounting, business or tax advice contained in the Tax E Man Blog or PatTax.net, including attachments, links and enclosures are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

 

 

High-Income Taxpayers

High Income Tax Payers

The Tax E Man Blog is a publication of Baldwin NY Tax Preparation and Representation firm Pat Tax Inc. Pat Tax and Enrolled Agent Patrick White provide tax consultation, preparation, and representation services to the Long Island communities of Baldwin NY, Freeport NY, Roosevelt NY, Uniondale NY and Hempstead NY and the Queens communities of Saint Albans NY, Cambria Heights NY, Laurelton NY, and Springfield Gardens NY.

Visit us at http://www.PatTax.net for the latest tax preparation tools and information. We can be contacted at PatTaxHelp@gmail.com or mobile: 917 533-8475.

 

High-Income Taxpayers

In addition to being subject to higher federal tax rates, taxpayers whose income exceeds certain levels have tax deductions and credits that are reduced or eliminated. The provisions listed may have additional qualifications and restrictions. Other provisions of the tax code, such as fringe benefit limitations and taxation on the sale of a principal residence, may further restrict a taxpayer’s ability to take deductions or cause the taxpayer to pay additional tax. Ask your tax professional for more details.

Capital Gains Tax Rates

 Long-Term Capital Gain Maximum Tax Rates

 For taxpayers with ordinary tax rate of

 2013 and After

 Top rate

 20%

 25% to rate below top rate

 15%

 10% or 15%

 0%

   

 Qualified Dividend Income Tax Rates

 For Taxpayers with ordinary tax rate of

 2013 and After

 Top rate

 20%

 25% to rate below top rate

 15%

 10% or 15%

 0%

   

 

Read High Income Taxpayers 2017 Here

 

 

2017 Itemized Deduction Phase-out

 Itemized deductions begin to phase out when
 Filing Status  Modified Adjusted  Gross Income
 Married Filing Jointly, Qualifying Widow

 $313, 800

 Head of Household

 $287, 650

 Single

 $261, 500

 MFS

 $156, 900

2017  Personal Exemptions

The personal exemption per is -$4,050

 Personal exemption’s  phase-out with the following AGI amounts.

 Filing Status

 AGI Beginning of Phase-out-AGI Completed Phase-out
 Married Filing Jointly, Qualifying Widow  $313,800-$436,300
 Head of Household  $287,650-$410,150
 Single  $261,500-$384,000
 Married Filing Separately  $156,900-$218,150

 

Read High Income Taxpayers 2017 Here

 

Any accounting, business, or tax advice contained in the Tax E Man Blog or http://www.PatTax.net, including attachments, links, and enclosures, are not intended as a thorough in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc. would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website http://www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax Inc. . Please feel free to contact us with any questions or concerns.

Pat can be contacted at 347 949-8293 or email: PatTaxHelp@gmail.com.

 

 

Expense and Tax Tracker on the Go-Get The Tax E Man App

 

Expense and Tax Tracker on the Go-Get the Tax E Man App

Need a handy mobile expense and tax organizing tool ? Give the free Tax E Man App a try !

It’s time again to organize all of those expense and tax documents. Keeping complete records helps in preparing the most accurate tax returns and decreases the possibility of being the target of an IRS audit.

The Tax E Man App for Android and iPhone makes your phone, iPad or Android device a “personal assistant”, collecting, organizing, storing and sending your yearly tax records.

The App, available under the Tax Pocket general app, was developed by App Giraffe in collaboration with the National Association of Tax Professionals. The Tax E Man App has been customized by Enrolled Agent Patrick White of Pat Tax Inc. And is provided free of charge.

Features

  1. Tax Organizer
  2. GPS Mileage Tracker
  3. My Tracker-allows for specific tracker creation and customization such as business, medical and childcare expenses
  4. Organizer and tracker information can be downloaded securely and displayed on spreadsheets or quick books.
  5. Transmit information securely to your tax preparer
  6. Contact information and office schedule
  7. http://www.PatTax.net website access, filled with tax preparation tools and information.

Download Instructions

  1. Visit www.TaxPocket.com here.

  2. On bottom of page, choose Google Play for Android devices and Apple Store for iPhone or iPad
  3. Download TaxPocket App-it is free.
  4. On top of the next page, next to “Tax Professionals”, tap magnifying glass which is search icon.
  5. Under Search by Zip Code, enter 11510
  6. Select Patrick White
  7. Select “Make This my Tax Professional”.
  8. You Got It !! Thanks !

Tax Treatment of Fringe Benefits

Fringe Benefits

The Tax E Man Blog, along with our website http://www.PatTax.net are designed to be year round resources for tax consultation, preparation, and representation services provided by Pat Tax Inc., Please feel free to contact us with any questions or concerns.

Pat can be contacted at 347 949-8293 or email: PatTaxHelp@gmail.com with any questions or concerns.

 

 

Tax Treatment of Fringe Benefits

The term “fringe benefit” refers to any benefit provided to an employee that is in addition to money. All benefits provided to an employee are taxable unless the law specifically excludes or defers tax on the benefit. Thus, a fringe benefit can either be taxable, tax-deferred, or excluded from taxation.

 
The personal use of an employer-provided vehicle is an example of a taxable fringe benefit. An employer contribution to a qualified retirement plan on behalf of the
employee is an example of a tax-deferred fringe benefit. Employer-provided health insurance for an employee is an example of a tax-free fringe benefit.

 

 

Business Owner

A small business owner in a corporate setting may be both the owner and an employee of his or her business. By taking advantage of excludable fringe benefits, the owner receives a double benefit. First, the cost of the benefit is deductible by the business. Second, the cost
of the benefit is tax free to the employee-owner.

 

 

Read 2016 Fringe Benefits Here

 

 

Nondiscrimination Rules for Fringe Benefits

Nondiscrimination rules are designed to prevent business owners from offering tax-favored fringe benefits to themselves but not their employees. In general,
if fringe benefits are offered to all employees, then all employees, including the top paid employees, receive tax-favored treatment on employee benefits. However, if a plan favors highly-compensated employees or key employees, the value of the benefit must be included in their taxable wages. The terms highly-compensated employees and key employees can mean different things depending on the applicable plan. Special restrictions apply for fringe benefits for sole proprietors, partners, certain LLC members, and S corporation shareholders.Consult your tax advisor if you are a business owner
considering providing fringe benefits to yourself and your employees.

 

 

Employer-Provided Vehicles

 

If an employer provides an employee with a company owned vehicle, and the employee uses the vehicle for personal purposes, the value of that personal use must be included as taxable income on the employee’s Form W-2. Under the general rule, the taxable amount equals the fair market value of the total use, minus the amount the employee pays for the use.

 

 

Employer-Provided Cell Phones

The value of an employer-provided cell phone, provided primarily for non-compensatory business reasons, is excludable from an employee’s income.

Non-compensatory Business Purposes

An employer needs substantial business reasons for providing the cell phone. Examples include:

  •  Need to contact the employee at all times for work-related emergencies,
  • Requirement that the employee be available to speak with clients at times when the employee is away from the office, and
  • Need to speak with clients located in other time zones at times outside the employee’s normal workday.

 

Read 2016 Fringe Benefits Here

 

 

Any accounting business or tax advice contained in the Tax E Man Blog or http://www.PatTax.net, including attachments, links and enclosures, are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax Inc. would be please to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website http://www.PatTax.net are designed to be year round resources for tax consultation, preparation, and representation services provided by Pat Tax Inc., Please feel free to contact us with any questions or concerns.

Pat can be contacted at 347 949-8293 or email: PatTaxHelp@gmail.com with any questions or concerns.