Taxpayers should check their federal withholding to decide if they need to give their employer a new W-4

Source : IRS 

The IRS encourages all taxpayers to review their federal withholding at least once a year to make sure they're not having too little or too much tax withheld.

Taxpayers whose employers withhold federal income tax from their paycheck can use the IRS Tax Withholding Estimator to help decide if they should make a change to their withholding. This online tool guides users, step-by-step through the process of checking their withholding, and provides recommendations to help aim for the withholding amount that's right for them.

Taxpayers should check with their employer to update their withholding or submit a new Form W-4, Employee's Withholding Certificate.

Adjustments to withholding
Individuals should generally increase withholding if they hold more than one job at a time or have income from sources not subject to withholding. If they don't make any changes, they will likely owe additional tax and possibly penalties when filing their tax return.

Individuals should generally decrease their withholding if they qualify for income tax credits or deductions other than the basic standard deduction.

Either way, those who need to adjust their withholding must submit the new W-4 information to their employer as soon as possible since withholding occurs throughout the year.

Individuals who should check their withholding include those:

• who are working two or more jobs at the same time or who only work for part of the year
• who claim credits such as the child tax credit
• with dependents age 17 or older
• who itemized deductions on prior year returns
• with large tax refunds or large tax bills for the previous tax year

Reasons to use the Tax Withholding Estimator
The IRS Tax Withholding Estimator can help taxpayers:

• Estimate their federal income tax withholding
• See how their refund, take-home pay or tax due are affected by withholding amount
• Choose an estimated withholding amount that works for them

Individuals who should not use the Tax Withholding Estimator are those:

Who have a pension but not a job. Form W-4P, Withholding Certificate for Pension or Annuity Payments, should be used to estimate this tax withholding.
Who have nonresident alien status. These individuals should use Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens.
Whose tax situation is complex. This includes alternative minimum tax, long-term capital gains or qualified dividends.

Taxpayers should prepare before using the Tax Withholding Estimator by having pay statements for all jobs, information for other income sources and their most recent income tax return. The tool does not ask for sensitive information such as name, Social Security number, address, or bank account numbers.

More information:
Publication 505, Tax Withholding and Estimated Tax

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Quarterly Estimated Tax Payments & Overseas Filing Deadlines - Reminder

Quarterly Estimated Tax Payments & Overseas Filing Deadlines - Reminder

If you are making quarterly estimated tax payments to the IRS, the due date for the April 1 – May 31 quarter of the year is June 15th, 2022.
If you are a U.S Citizen or Green Card Holder living abroad or in active military service and have not filed your taxes yet, the deadline is also on June 15th.
For payments made using IRS Direct Pay, you can make payments until 8PM EST, and for payments using a credit or debit card, payments can be made up to midnight on the due date.

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
7. 
   

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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.