IRS provides easy access to tax refund status with ‘Where’s My Refund?’ tool; no need to call

Issue Number:    IR-2023-46

WASHINGTON – The Internal Revenue Service reminds taxpayers that the "Where's My Refund?" tool on IRS.gov is the most convenient way to check the status of 2022, 2021 and 2020 tax refunds. IRS2Go, the mobile app, offers another way for users to check their refund status.

Information for the most current tax year filed is generally available within 24 hours after the IRS acknowledges receipt of a taxpayer's e-filed return. If they filed a paper return, taxpayers should allow four weeks before checking the status.

To use "Where's My Refund?," taxpayers must enter their Social Security number or Individual Taxpayer Identification number, filing status and the exact whole dollar amount of their expected refund from the original tax return for the year they're checking.

The IRS updates the tool once a day, usually overnight, so there's no need to check more often. This prevents individuals from having to contact the IRS for updates unless the tool requests them to call.

"Where's My Refund?" displays progress through three phases:

1. Return Received.
2. Refund Approved.
3. Refund Sent.

Taxpayers will get personalized refund information based on the status of their tax return. The tool will provide an actual refund date once the IRS processes the return and approves the refund.

The fastest way to get a refund is by filing electronically and using direct deposit. Taxpayers who don't have a bank account can find out how to open a bank account at a FDIC-Insured Bank or the National Credit Union Locator Tool.

What to expect
Even though most refunds are issued in less than 21 days for taxpayers who file electronically and choose direct deposit, some refunds may take longer. Many different factors can affect the timing of a refund, such as if the return has errors, is incomplete or is affected by identity theft or fraud.

Other causes for delays:

• The return may require additional review.
• The return needs a correction to the Earned Income Tax Credit or Additional Child Tax Credit.
• The time between the IRS issuing the refund and the bank posting it to an account may vary since many banks do not process payments on weekends or holidays.

The IRS will contact taxpayers by mail if more information is needed to process a return. IRS phone and walk-in representatives can only research the status of a refund if:

• 21 days or more have passed since it was filed electronically.
• Six weeks or more have passed since a return was mailed.
• "Where's My Refund?" tells the taxpayer to contact the IRS.

If a taxpayer refund isn't what is expected, it may be due to changes the IRS made to the return. These changes could include corrections to the Child Tax Credit or Earned Income Tax Credit amounts or
an offset from all or part of the refund amount to pay past-due tax or debts. More information about reduced refunds is available on IRS.gov.

Filing a tax return
Taxpayers should make IRS.gov their first stop to get information on how to file. There is information on:

• IRS Free File,
• IRS Online Accounts,
• Answers to tax questions and
• Tips on filing a return.

As a reminder, the deadline for most taxpayers to file a tax return, pay any tax due or request an extension to file is Tuesday, April 18.

This news release is part of a series called the Tax Time Guide, a resource designed to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax for Individuals.

More resources:

• About "Where's My Refund?"
• Online Account FAQs
• Tax season refund FAQs
• Direct deposit
• Choosing a tax professional
• IRS Free File

Free tax return preparation for qualifying taxpayers

 Contact Surya Padhi at Sure Financials for any question and clarification. Surya Padhi is an expert who keeps current on tax law changes as well as a member of the National Association of Tax Professionals National Association of Tax Professionals (NATP) and  New Homepage - National Association of Enrolled Agents (naea.org). Visit Welcome | Sure Financials & Tax Services, LLC (surefintaxsvs.com) for more information and contact us by calling +1908.300.9193.

Be Prepared: What Can Cause An IRS Audit?

Tax season is upon us, and though you may be dreading having to report your earnings, you’ll want to make sure you do it correctly. Filing mistakes and blatant fraud can lead to an IRS audit. As unsettling as that thought may be, it’s important to be aware of the various triggers that can result in the scrutiny of the Internal Revenue Service. What can cause an IRS audit? In this article, we’ll provide an overview of the most common reasons for IRS audits, as well as tips on how to reduce your chances of being audited.

1.  Key Points

·What are audit trigger points? Inaccurate information or missing information

·How to avoid it?

2.Failure to Report All Income

Failure to report all of your income is one of the most common reasons that you may find yourself facing an IRS audit. The IRS collects all of your income information from the various forms that you submit throughout the year, such as 1099 forms for income from investments or W-2s for income from wages, as well as income from self-employment. If you fail to report any of this income, the IRS can identify it and initiate an audit as a result.  To avoid this, it’s important to double-check that you have reported all of your income before submitting your tax return.

3.Misreporting Income or Expenses

One of the most common causes of IRS audits is misstating your income or expenses on your tax return. This could be intentional, such as leaving specific items out, or unintentional, such as forgetting to include a receipt for a deduction. It is important to always be accurate and truthful when filing taxes. The IRS has a variety of sophisticated methods for determining if a taxpayer has misreported income or expenses. If you are caught doing so, you could face hefty fines and penalties, as well as being required to pay back any taxes that should have been paid. To avoid an IRS audit due to misreporting income or expenses, always ensure you are being honest and accurate when completing your tax return.

4.Taking Excessive Deductions 

One thing that can trigger an IRS audit is taking excessive deductions. It’s important to accurately report all of your deductions on your taxes, including itemizing deductions if necessary. However, if you take too many deductions, the IRS may decide to investigate you further. Be sure that any deductions you take are allowable under IRS regulations to avoid an audit. When in doubt, consult with a tax professional to make sure you’re in compliance with IRS rules.

5.Underpaying Estimated Taxes 

One of the most common reasons for an IRS audit is underpayment of estimated taxes. When you are self-employed or have other sources of income outside of your job, you may be required to make estimated tax payments to the IRS. If you do not make estimated payments or do not pay the required amount, you could be subject to a tax audit. It is important to accurately estimate your taxes each year and make timely payments so you can avoid an audit.

6.Incorrectly Filing as a Business 

Filing as a business can be beneficial for those who run their own business, but it can lead to an IRS audit if done incorrectly. If the IRS finds that an individual is not running an actual business or is misclassifying their expenses and income, they can choose to audit. Incorrectly filing as a business can result in an individual being taxed on their self-employment income as well as potentially paying back taxes, interest, and other associated fees. To avoid an audit, individuals should make sure they are filing their taxes as a business accurately and in accordance with IRS regulations.

7.Claiming Large Charitable Donations 

Claiming large charitable donations is one of the top reasons for IRS audits. When claiming a large donation, the IRS is likely to take a closer look to make sure the deduction is valid. Therefore, it is important to be aware of the rules and regulations associated with claiming charitable donations. Documentation to substantiate the donation is critical when claiming large deductions. These documents should include records such as receipts from the charity, details from the charity regarding the donation, and a written appraisal of any non-cash donations. Furthermore, when claiming large donations, taxpayers need to be especially careful to avoid inaccuracies which could trigger an audit.

8.Claiming Too Many Dependents 

One of the most common reasons for an IRS audit is claiming too many dependents on your tax return. When you are preparing your tax return, you should always be sure to double check how many dependents you are claiming. If you claim more dependents than you actually have, it could trigger an audit as the IRS may suspect that you are trying to take advantage of them. Make sure to verify the number of dependents that you can legally claim and always ensure that you are accurately representing the information on your tax return.

9.How to Minimize Your Chance of an IRS Audit

When it comes to taxes, the last thing most of us want to think about is the dreaded IRS audit. But sometimes, circumstances can lead to an audit. To minimize the chances of your return being audited, it’s important to understand what usually causes the IRS to take a closer look at your finances. Here are some of the most common triggers for an IRS audit.

• Inconsistencies Between Your Tax Return and Your Income Reports: If the amount of income you report on your tax return doesn’t match the amount reported to the IRS by your employer or other payers, it has the potential to raise some red flags. That’s why it’s so important to double check your information and make sure that your numbers are accurate when you are filing your tax return.
• Large Deductions: If you claim a large deduction for business expenses, it can trigger an audit. To minimize your chances of an audit, make sure you have the necessary documentation to back up your deductions.
• Self-Employment Income: If you’re self-employed, the IRS is likely to take an extra close look at your finances. Even if you’re running a legitimate business, your return can be flagged if the numbers don’t add up or if your deductions seem too high.
• Home Office Deduction: If you’re claiming a home office deduction, the IRS may want to make sure that your office actually qualifies as a legitimate business expense. When claiming this deduction, be sure to keep detailed records and make sure that your office space meets the criteria set by the IRS.
• Cash Payments: If you accept or make large cash payments, the IRS may want to investigate to make sure you’re not engaging in any suspicious activities.

These are just some of the more common triggers for an IRS audit. To minimize your chances of an audit, make sure that your paperwork is in order and that you’re claiming only legitimate deductions. If you ever have questions about what you can and can’t claim, it’s a good idea to consult a tax professional.

Contact Surya Padhi at Sure Financials for any question and clarification. Surya Padhi is an expert who keeps current on tax law changes as well as a member of the National Association of Tax Professionals National Association of Tax Professionals (NATP) and  New Homepage - National Association of Enrolled Agents (naea.org). Visit Welcome | Sure Financials & Tax Services, LLC (surefintaxsvs.com) for more information and contact us by calling +1908.300.9193.

IRS Audit. What you need to know?

Just when you thought you were done with taxes, the IRS sends a letter informing you that an audit has been initiated.

Certain audits won't result in a higher tax bill from the Internal Revenue Service. Nonetheless, you can become anxious if you receive a letter. Is there going to be a significant fine? To what extent is the IRS privy to information about your life that you are unaware of?

You probably didn't intentionally do anything improper. National Taxpayer Advocate for the IRS's Taxpayer Advocate Program Erin Collins has stated that the IRS is not out to punish people for honest mistakes.

The Internal Revenue Service is well aware that tax day is a bittersweet one for many and that some taxpayers will go to great lengths to avoid forking over their dues. This is the main reason why the IRS investigates tax returns submitted by individuals and corporations.

1. Key Points

• What is an IRS audit?
• IRS method of communication
• How to deal with IRS Audit.

2. Tax audit definition

If the Internal Revenue Service suspects that you haven't paid all of the taxes that you owe, they may request an audit of your tax return. So, you may need to submit supporting documents, such as receipts, to verify that you are qualified for a credit or deduction you claimed on your tax return.

3.Where do IRS audit letters come from?

The Internal Revenue Service will always communicate with you by sending a letter in the mail. You will never be contacted by phone or e-mail in the event of an audit being conducted. If you are contacted in this manner in the beginning, the transaction is probably fake. IRS  letter will provide you with all of the information that you want regarding your audit, including the date by which you are required to take action.

After that, the vast majority of audits will continue to be carried out by postal correspondences; nevertheless, a tiny number of audits will require you to speak with an IRS agent either in person or over the phone in order to amend your return.

4.What does an IRS audit letter look like?

This is an example of the kind of letter that the Internal Revenue Service (IRS) could send to a taxpayer to inform them that their taxes are being audited. The letter will provide you with all of the information that you want on your audit, including the date by which you are required to take action.

It is essential that you check the accuracy of all of your personal information, including your Social Security number, address, and contact information.

You can register an online account with the Internal Revenue Service (IRS), if you haven't done so previously, and use it to examine digital copies of notices that have been sent to you.

5.How many years back can you be audited?

According to the Internal Revenue Service (IRS), an audit that the IRS performs on you may include returns that you have filed during the past three years.

"In the event that we find a significant mistake, we might tack on some additional years. In most cases, we don't look further back than the previous six years "according to a post made on the website of the organization. "The Internal Revenue Service makes every effort to conduct audits of tax returns as quickly as feasible after they have been submitted. As a result, the majority of audits will focus on returns that have been submitted during the last two years."

6. What should you do if you get audited? 

The initial step should be to "really open the letter," as this is the most important step. It's possible that a lot of individuals will be tempted to throw them away because they anticipate that it will contain unfavorable information. Ignoring correspondence from the government is the worst thing that you can do as a taxpayer. You need to get back to us as soon as possible, either in writing or by giving us a call. In most cases, the letter you get from the Internal Revenue Service (IRS) will tell you how many days you have to answer to their inquiry. You also have the option to seek additional time to respond.

Failure to answer may result in the assessment of further penalties and interest. It is also possible that you will lose the right to appeal the fees that the IRS thinks you owe to them. It is also possible that it will exacerbate the situation and lead to a legal case.

Once an audit has been initiated, it is vital that you cooperate with the IRS auditor and establish a positive working relationship with them. Get the help of a qualified professional to assist you and handle your situation.

Contact Surya Padhi at Sure Financials for any question and clarification. Surya Padhi is an expert who keeps current on tax law changes as well as a member of the National Association of Tax Professionals National Association of Tax Professionals (NATP) and  New Homepage - National Association of Enrolled Agents (naea.org). Visit Welcome | Sure Financials & Tax Services, LLC (surefintaxsvs.com) for more information and contact us by calling +1908.300.9193.

 

What to do when a W-2 or Form 1099 is missing or incorrect

Issue Number: IRS Tax Tip 2023-25

It’s important for taxpayers to have all their documents and information so they can file an accurate and complete tax return. This may mean waiting to file until they receive all their documentation – and it can also mean following up on missing or incorrect documents.

Most taxpayers should have received income documents near the end of January. These may include:

• Form W-2, Wage and Tax Statement
• Form 1099-MISC, Miscellaneous Income
• Form 1099-INT, Interest Income
• Form 1099-NEC, Nonemployee Compensation
• Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund

Taxpayers should first contact the employer, payer or issuing agency directly for copies
Taxpayers who haven't received a W-2 or Form 1099 should contact the employer, payer or issuing agency and request a copy of the missing document or a corrected document.  

If they can’t get a copy, they can contact the IRS for help
Taxpayers should file their tax return on time – this year’s tax deadline is April 18 for most filers – even if they still have missing or incorrect documents. If they don’t receive the missing or corrected form from their employer or payer by the end of February, they may call the IRS at 800-829-1040 for help. They’ll need to provide their name, address, phone number, Social Security number and dates of employment. They’ll also need to provide the employer’s or payer’s name, address and phone number. The IRS will contact the employer or payer and request the missing form.

Estimating income when forms are incorrect or missing
After the taxpayer contacts the IRS about missing documents, the IRS will send the taxpayer one of these forms:

Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc.

If the taxpayer doesn’t receive the missing form in time to file their income tax return by the filing due date, they may complete Form 4852 or Form 1099-R to estimate their wages and earnings. They then attach the relevant form to their tax return when they file.

Taxpayers may need to file an amended return if they filed with missing or incorrect info
If they receive the missing or corrected Form W-2 or Form 1099-R after filing their return and the information differs from their previous estimate, they must file Form 1040-X, Amended U.S. Individual Income Tax Return.

Incorrect Form 1099-G for unemployment benefits
Taxpayers who receive an incorrect Form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised Form 1099-G showing they did not receive these benefits. Taxpayers who are unable to obtain a timely, corrected form from the state should still file an accurate tax return, reporting only the income they received.

Sure Financials and Tax Services LLC

Phone:+1.908.300.9193, Fax:+1.855.753.0066

Email:services@surefintaxsvs.com | Web: https://surefintaxsvs.com

Reserve your time | 15 mins free | Tax Finalization Free |Paid Consultation 60 Mins.

 

Passive Income that are not taxable.

There are numerous ways to earn passive income, but unfortunately, most of them are taxable. This is particularly true of income-generating investments, of which only a handful allow you to avoid paying tax.

However, there are some credits, settlements and payouts that you can receive tax-free, although these are typically paid either annually or a single time. Here’s a look at some of the types of passive income that aren’t taxable. 

 

Tax free passive income

• Tax free municipal bonds
• Inheritance
• Life insurance proceeds
• Disability payments
• Gifts
• Alimony
• Child support
• Roth IRA withdrawals
• Disaster mitigation payments
• Qualifying adoption reimbursement
• Qualified HSA disbursement
• State income with no state tax.

Tax-Free Municipal Bonds

Buying municipal bonds is the easiest and one of the only ways to make money from your investments without paying taxes. Most municipal bonds are not taxed by the federal government. Most of the time, people who live in the same state as the issuer get a tax break at the state level as well. But, if they happen, capital gains are fully taxed.

Inheritance

No matter how much of an inheritance you get, you won't have to worry about paying federal tax on it. In some cases, the person who died may have to pay estate taxes, but beneficiaries don't have to worry about that. However, there is an inheritance tax in six states, so you'll need to check to see if all of your money is tax-free.

Life Insurance Proceeds

If you are named as the beneficiary of a life insurance policy (except for a foreign life insurance policy), you won't have to pay income tax on the money. This is true even if your policy is worth a million dollars or more. Note that if you cash in a life insurance policy instead of getting the death benefit, you may have to pay taxes on some or all of the money.

 

Disability Payments

In some situations, disability payments can be counted as income that needs to be taxed. But if you pay all of the premiums for a health or accident insurance plan, any disability payments you get are not taxed.

Gifts

The person who gives the gift may have to pay taxes on it if it is worth more than the annual exclusion amount, which is $17,000 per person in 2023. But people who get gifts don't have to pay tax on what they get.

Alimony

Before 2019, the person who paid alimony could write it off and the person who got it had to pay taxes on it. After January 1 of that year, people who paid alimony could no longer deduct it, and people who got it no longer had to pay tax on it. But keep in mind that some states, like California, do not follow this change at the federal level and still tax alimony.

Child Support

According to the IRS, child support payments are the same as alimony payments in that neither the person paying nor the person getting the money has to pay taxes on it.

Roth IRA Withdrawals

The money you take out of a Roth IRA is usually tax-free, which is different from a traditional IRA. As long as your withdrawals are "qualifying," which usually means you've had the account for at least five years and are older than 59.5, you won't have to pay taxes on any money you take out, even if it comes from interest or capital gains.

Disaster Mitigation Payments

If you are affected by a disaster, your state or local government may give you a payment to help you recover. These payments do not count as income for tax purposes.

Qualifying Adoption Reimbursements

You can get a tax credit for qualified adoption costs, and you can also leave out of your income any adoption assistance payments from your employer.

Qualified HSA Funding Distribution

You can move money from your IRA to your HSA account one time without having to pay taxes on that money.

Income in a State With No Income Tax

At the moment, only Alaska, South Dakota, Nevada, Florida, Texas, Wyoming, Washington, and Tennessee do not tax income that is usually taxed at the federal level. This is one of the few times when regular income that is usually taxed is not taxed. Even if you live in a state with no income tax, you still have to pay federal taxes on your income.

 

 

Sure Financials and Tax Services LLC

Phone:+1.908.300.9193, Fax:+1.855.753.0066

Email:services@surefintaxsvs.com | Web: https://surefintaxsvs.com

Reserve your time | 15 mins free | Tax Finalization Free |Paid Consultation 60 Mins.

 

Get Up to $1,500 Through the NJ ANCHOR Program

You may be eligible to receive up to $1,500 in property tax relief. Read below to find out if you qualify and learn how to apply. The deadline to apply is February 28^th, 2023.

Homeowners with income of $250,000 or less are eligible. To apply: 

• Apply online 
• Complete a paper application and mail it along with any necessary supporting documents.
• Apply over the phone by calling 1-877-658-2972 

• Homeowners need an ANCHOR ID and PIN to apply online or by phone. If you did not receive a mailer or email with an ID and PIN but filed a Homestead Benefit application last year, access the online ID and PIN inquiry system to retrieve your ID and PIN. Certain homeowners must file a paper application for reasons listed here. 

Renters and tenants with income of $150,000 or less are eligible. To apply: 

• Apply online 
• Complete a paper application and mail it along with any necessary supporting documents.
• Renters and tenants do NOT need an ID and PIN to apply.

*Please note that there is no phone application option available for renters/tenants.

Maximize Your Tax Benefits with The IRS EV Tax Credit

Introduction
Are you considering buying an electric vehicle (EV) but worried about the cost? The good news is that the IRS offers an EV Tax Credit of up to $7,500 to help offset the cost of your new car. In this article, we will discuss who is eligible for the EV credit, what type of vehicles qualify, and how you can apply for the credit. With all of the information provided here, you will be able to confidently maximize your savings when buying an EV.

What is the EV Tax Credit?

The deduction is a part of President Joe Biden's Inflation Reduction Act of 2022. More than $370 billion in tax breaks and other subsidies are set aside in this law for renewable energy, wind power, and battery-powered vehicles. The new rule, which went into effect on January 1, can be utilized to get financing for things like cars, solar panels, and electrical system upgrades.

To whom does the $7,500 tax credit apply, and what must be done to qualify?
A single taxpayer must have earned less than $150,000 or a married couple less than $300,000 in 2021 to qualify for the maximum credit of $7,500 allowed by the law.
You should know that the credit only applies to electric vehicles MSRP up to $55,000 or $80,000 for trucks. Customers should be aware that the credit amount decreases by $500 for each criteria the vehicle does not meet, for a maximum credit of $7,500.

Eligible Vehicles
According to the Department of Energy, 29 electric models were manufactured in the United States corresponding to 2022 and 2023 models, which belong to the brands Audi, BMW, Chevrolet, Chrysler, Ford, GMC, Jeep , Lincoln, Lucid, Nissan, Rivian, Tesla, Volvo, Cadillac, Mercedes and Volkswagen.
For a vehicle to be eligible, it must:

* Have a battery capacity of at least 7 kilowatt hours
* Have a gross weight class of less than 14,000 pounds
* Be manufactured by a qualified manufacturer
* The sale qualifies only if the vehicle is new. Sellers must report your name and tax identification number to the IRS.
Follow IRS URL for more information-> Manufacturers and Models for New Qualified Clean Vehicles Purchased in 2023 or After | Internal Revenue Service (irs.gov)<https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2023-or-after>
Vehicles purchased on or before 16 August 2022, may be eligible for a $7,500 tax credit as well. However, the eligibility requirements are different<https://www.irs.gov/credits-deductions/credits-for-new-electric-vehicles-purchased-in-2022-or-before>. After that date, a final assembly in North America requirement was added.
Contact Surya Padhi at Sure Financials for any questions and clarification. Surya Padhi is an expert who keeps current on tax law changes as well as a member of the National Association of Tax Professionals National Association of Tax Professionals (NATP)<https://www.natptax.com/> and National Association of Enrolled Agents (naea.org)<https://www.naea.org/>. Visit Welcome | Sure Financials & Tax Services, LLC (surefintaxsvs.com)<https://surefintaxsvs.com/> for more information and contact us by calling +1 908.300.9193.