Reduce Your Tax Payable Or Increase Your Refund.

 Reduce Tax Payable Or Increase Refund

• Retirement Account : Max out contribution to your 401K, IRA , HSA account. These  contributions reduce your tax liability and increase refund. Although you can contribute to these accounts till 15th April, 2022. I would suggest planning it now, so that you can avoid last minute rush. Check for tax year 2021 limits

• Charitable Deduction: Now you can claim cash donation to certain charitable up to $600.00 (MFJ), or $300.00 (Single), even though you elect to  use standard deduction. If you are claiming a charitable contribution, you need to keep receipt of such a donation. 

• Loss Harvesting : Tax loss harvesting is when you sell some investments at a loss to offset gains you’ve realized by selling other stocks at a profit. The result is that you only pay taxes on your net profit, or the amount you’ve gained minus the amount you lost, thereby reducing your tax bill. Single filers and married couples filing jointly can deduct up to $3,000 in realized losses from ordinary income.

• Wash Sales: You can’t, for instance, sell a stock to realize a loss and minimize your tax burden—and then rebuy that exact same stock, or even one that’s nearly identical. This maneuver is referred to as a wash sale. A wash sale occurs when you sell securities at a loss and within 30 days before or after the sale buy “substantially” identical securities, or acquire a contract or option to do so. The wash sale rule does not, however, preclude purchasing securities in the same industry. For example, you can sell shares of Pfizer and replace them with shares of Merck. 

• Flexible Spending Account: FSA : Use IT or Lose IT. A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs. FSAs are limited to $2,750 per year per employer. If you’re married, your spouse can put up to $2,750 in an FSA with their employer. You generally must use the money in an FSA within the plan year. But your employer may offer one of 2 options:(1) It can provide a "grace period" of up to 2 ½ extra months to use the money in your FSA.(2) It can allow you to carry over up to $550 per year to use in the following year. As per [ https://www.irs.gov/pub/irs-drop/n-21-15.pdf], this rule temporarily  is allowing carry entire unused amount to next year

• Defer your income: By deferring ( postponing ) income to  next year, you may be able to minimize your current income tax liability. 

IRS Notice CP12 – Changes to Your Form 1040. Did you receive a notice CP12 from the IRS?

Did you receive a notice CP12 from the IRS? If so, it's most likely due to an error or mistake on your latest tax return. Consequently, you are now either due a tax refund, your original refund amount has changed, or you now might owe income taxes.

Changes to Your Refund, Taxes Owed

Notice CP12 will detail a change in your tax liability as adjusted by the IRS - not by eFile.com or any other tax preparation platform. For tax returns filed or e-filed in 2021, many taxpayers received this notice explaining a reduction of their refund due to the calculation of the Recovery Rebate Credit on their 2020 Return. Taxpayers in 2022 are receiving this notice after filing their 2021 Return due to inaccurate entry of their third stimulus payment. Notice CP12 might list these reasons why your tax return results changed:

• IRS: "The Social Security number of one or more individuals claimed as qualifying dependent(s) was missing or incomplete." 
• IRS: "The last name of one more individual claimed as a qualifying dependent does not match our (IRS) records."
• IRS: "One or more individuals claimed as qualifying dependents exceeds the age limit."
• IRS: "The amount (Recovery Rebate Credit) was computed incorrectly (on the respective tax return)."

Respond to Notice CP12

IRS Notice CP12 may require some attention, especially if your refund was changed into taxes owed. Please take these steps regarding Notice CP12:

1. Read the content of the notice CP12 carefully so you know the purpose of the IRS tax return correction or adjustment.
2. If the notice is about a Recovery Rebate Credit adjustment that resulted in a lower than expected tax refund or a higher than expected tax liability, go back and gather the exact payments you received for Stimulus 1, Stimulus 2, and/or Stimulus 3 from IRS Letters 1444, 1444B, and 1444C. Stimulus 1 and 2 are not part of the 2021 Return, but may be helpful in understanding the amounts you received.
3. Then, REVIEW your return and double check if you entered the exact amount for Stimulus 3 on your 2021 Tax Return on the Recovery Rebate Credit 
4. If you think one or more stimulus payment amounts you received are incorrect, verify your eligibility and payment amounts 
5. Review your appeal rights and steps to take to prepare a protest if you disagree with Notice CP12.
6. If you think the IRS made a mistake by adjusting your tax return based on Notice CP12, either contact the IRS via the contact information listed on Notice CP12 or contact us services@surefintaxsvs.com
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Sure Financials and Tax Services LLC

Mobile: 908.300.9193 | Fax: 855.753.0066

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Use IRS Tax Withholding Estimator, Reduce Your Penalty for Short Payment.

The IRS encourages everyone to use the Tax Withholding Estimator to perform a “paycheck checkup.”  This will help you make sure you have the right amount of tax withheld from your paycheck.

There are several reasons to check your withholding:

• Checking your withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.
• At the same time, you may prefer to have less tax withheld up front, so you receive more in your paychecks and get a smaller refund at tax time.

Use your results from the Tax Withholding Estimator to help you complete a new Form W-4, Employee's Withholding Certificate, and submit the completed Form W-4 to your employer as soon as possible. Withholding takes place throughout the year, so it’s better to take this step as soon as possible.

To conduct a "paycheck checkup", you can use the IRS’s Tax Withholding Estimator (www.irs.gov/W4App). To effectively use the estimator, it is helpful to have a copy of your most recent pay stub and tax return.

Refer for slide for How to Do?  https://app.box.com/s/8m6ftx86luvivghp8u766py4avhk32a9

Sure Financials and Tax Services LLC

Mobile: 908.300.9193 | Fax: 855.753.0066

E-Mail:services@surefintaxsvs.com

Web:https://surefintaxsvs.com/

What you need to know about FBAR

FBAR stands for "Foreign Bank Account Report". FBAR filing refers to FinCen Form 114, Report of Foreign Bank and Financial Accounts.

We at SURE FINANACIALS AND ATX SERVICES LLS are helping our customer  on FBAR related matters.

Call us +1 908 300 9193 or E-Mail us services@surefintaxsvs.com

What you should know when selling a Home?

 Source : IRS

Here are some key things homeowners should consider when selling a home:

Ownership and use

To claim the exclusion, the taxpayer must meet ownership and use tests. During a five-year period ending on the date of the sale, the homeowner must have owned the home and lived in it as their main home for at least two years.

Gains

Taxpayers who sell their main home and have a gain from the sale may be able to exclude up to $250,000 of that gain from their income. Taxpayers who file a joint return with their spouse may be able to exclude up to $500,000. Homeowners excluding all the gain do not need to report the sale on their tax return.

Losses

Some taxpayers experience a loss when their main home sells for less than what they paid for it. This loss is not deductible.

Multiple homes

Taxpayers who own more than one home can only exclude the gain on the sale of their main home. They must pay taxes on the gain from selling any other home.

Reported sale

Taxpayers who don't qualify to exclude all the taxable gain from their income must report the gain from the sale of their home when they file their tax return. Anyone who chooses not to claim the exclusion must report the taxable gain on their tax return. Taxpayers who receive Form 1099-S, Proceeds from Real Estate Transactions, must report the sale on their tax return even if they have no taxable gain.

Possible exceptions

There are exceptions to these rules for some individuals, including persons with a disability, certain members of the military, intelligence community and Peace Corps workers.

Worksheets

Worksheets included in Publication 523, Selling Your Home, can help taxpayers figure the adjusted basis of the home sold, the gain or loss on the sale and the excluded gain on the sale.

School is out for the summer, but tax planning is year-round

Source - IRS.

School is out for the summer, but tax planning is year-round

Now that the April filing deadline has passed, most people are spending more time thinking about summer vacations than taxes. However, summer is a great time to review withholding and see if summer plans will affect next year's tax return. Below are some common summertime tax situations and tips to help taxpayers figure out if they apply to their tax situation.

Getting married
Newlyweds should report any name change to the Social Security Administration. They should also report an address change to the United States Postal Service, their employers and the IRS. To report a change of address for federal tax purposes, taxpayers must complete Form 8822, Change of Address and submit it to the IRS. This will help make sure they receive the documents they will need to file their taxes.

Sending kids to summer day camp
Unlike overnight camps, the cost of summer day camp may count towards the child and dependent care credit.

Working part-time
While summertime and part-time workers may not earn enough to owe federal income tax, they should remember to file a return. They'll need to file early next year to get a refund for taxes withheld from their checks this year.

Gig economy work
Taxpayers may earn summer income by providing on-demand work, services or goods, often through a digital platform like an app or website. Examples include ride sharing, delivery services and other activities. Those who do are encouraged to visit the Gig Economy Tax Center at IRS.gov to learn more about how participating in the gig economy can affect their taxes.

Normally, employees receive a Form W-2, Wage and Tax Statement, from their employer to account for the summer's work. They'll use this to prepare their tax return. They should receive the W-2 by January 31 next year. Employees will get a W-2 even if they no longer work for the summertime employer.

Summertime workers can avoid higher tax bills and lost benefits if they know their correct status. Employers will determine whether the people who work for them are employees or independent contractors. Independent contractors aren't subject to withholding, making them responsible for paying their own income taxes plus Social Security and Medicare taxes.

Remember to file their tax return if they got an extension
People who requested an extension to October 17 or missed the April deadline should be sure to file their return. Many taxpayers can prepare and e-file tax returns for free with IRS Free File. MilTax online software is also available for the members of military and certain veterans, regardless of income. This software is offered through the Department of Defense. Eligible taxpayers can use MilTax to prepare and electronically file their federal tax returns and up to three state returns, for free.

Adjust withholding now to avoid tax surprises next year
Taxpayers can avoid a tax surprise next filing season by reviewing their withholding now. Life events like marriage, divorce, having a child, or a change in income can all affect taxes. The IRS Tax Withholding Estimator on IRS.gov helps employees assess their income tax, credits, adjustments and deductions and determine whether they need to change their withholding by submitting a new Form W-4, Employee's Withholding Allowance Certificate. Taxpayers should remember that, if needed, they should submit their new W-4 to their employer, not the IRS.

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Sure Financials and Tax Services LLC

Mobile: 908.300.9193 | Fax: 855.753.0066

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Did you get CP11? (IRS Notice CP11)

When IRS made changes to your return because IRS believe there's a miscalculation  and you owe money on your taxes as a result of these changes, then IRS will send this notice CP11. 

Let us know to resolve this letter. 

The following images are an example of CP11.