Genesis Tax Resolution

03/01/2023

Understand digital asset reporting and tax requirements
The IRS reminds taxpayers that there’s a question at the top of Forms 1040 and 1040-SR that asks about digital asset transactions. All taxpayers filing these forms must check the box indicating either “yes” or “no.”

If an individual disposed of any digital asset that was held as a capital asset through a sale, exchange or transfer, they should check “Yes” and use Form 8949, Sales and other Dispositions of Capital Assets, to figure their capital gain or loss and report it on Schedule D (Form 1040), Capital Gains and Losses, or Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, in the case of a gift.

Examples of transactions involving digital assets include:

A sale of digital assets.
The receipt of digital assets as payment for goods or services provided.
The receipt or transfer of digital assets for free (without providing any consideration) that does not qualify as a bona fide gift.
The receipt of new digital assets as a result of mining and staking activities.
The receipt of new digital assets as a result of a hard fork.
An exchange of digital assets for property, goods or services.
An exchange/trade of digital assets for another digital asset(s).
Any other disposition of a financial interest in digital assets.
If individuals received any digital assets as compensation for services or disposed of any digital assets they held for sale to customers in a trade or business, they must report the income as they would report other income of the same type (for example, W-2 wages on Form 1040 or 1040-SR, line 1a, or inventory or services on Schedule C).

03/01/2023

Understand digital asset reporting and tax requirements

The IRS reminds taxpayers that there’s a question at the top of Forms 1040 and 1040-SR that asks about digital asset transactions. All taxpayers filing these forms must check the box indicating either “yes” or “no.”

If an individual disposed of any digital asset that was held as a capital asset through a sale, exchange or transfer, they should check “Yes” and use Form 8949, Sales and other Dispositions of Capital Assets, to figure their capital gain or loss and report it on Schedule D (Form 1040), Capital Gains and Losses, or Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, in the case of a gift.

Examples of transactions involving digital assets include:

A sale of digital assets.
The receipt of digital assets as payment for goods or services provided.
The receipt or transfer of digital assets for free (without providing any consideration) that does not qualify as a bona fide gift.
The receipt of new digital assets as a result of mining and staking activities.
The receipt of new digital assets as a result of a hard fork.
An exchange of digital assets for property, goods or services.
An exchange/trade of digital assets for another digital asset(s).
Any other disposition of a financial interest in digital assets.
If individuals received any digital assets as compensation for services or disposed of any digital assets they held for sale to customers in a trade or business, they must report the income as they would report other income of the same type (for example, W-2 wages on Form 1040 or 1040-SR, line 1a, or inventory or services on Schedule C).

03/01/2023

IRS reminder to report all income; gig economy and service industry, digital or foreign assets and sources

WASHINGTON − The Internal Revenue Service reminds taxpayers of their reporting and potential tax obligations on income from the gig economy and service industry, transactions from digital assets, and foreign sources or holding certain foreign assets.

Information available on IRS.gov and Instructions for Form 1040 and Form 1040-SR can help taxpayers understand and meet these reporting and tax requirements.

Gig economy earnings are taxable
Generally, income earned from the gig economy is taxable and must be reported to the IRS on tax returns.

The gig economy is activity where people earn income providing on-demand work, services or goods, such as selling goods online, driving a car for deliveries or renting out property. Often, it’s through a digital platform like an app or website.

Taxpayers must report income earned from the gig economy on a tax return, even if the income is:

From part-time, temporary or side work.
Paid in any form, including cash, property, goods or digital assets
Not reported on an information return form like a Form 1099-K, 1099-MISC, W-2 or other income statement.
For more information on the gig economy, visit the gig economy tax center.

Service industry tips are also taxable
People who work in restaurants, salons, hotels and similar service industries often receive tips for the customer service they provide. Tips are usually taxable income, and it's important for people working in these areas to understand details on how to report tips.

Tips are optional cash or noncash payments customers make to employees.

Cash tips include those received directly from customers, electronically paid tips distributed to the employee by their employer and tips received from other employees under any tip-sharing arrangement. All cash tips must be reported to the employer, who must include them on the employee’s Form W-2, Wage and Tax Statement.
Noncash tips are those of value received in any other medium than cash, such as: tickets, passes or other goods or commodities a customer gives the employee. Noncash tips aren't reported to the employer but must be reported on a tax return.
Any tips the employee didn't report to the employer must be reported separately on Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to include as additional wages with their tax return. The employee must also pay the employee share of Social Security and Medicare tax owed on those tips.

02/03/2023

The benefits of having a tax refund direct deposited

Receiving a tax refund is happy news to any taxpayer; getting it quickly is even better. Direct deposit is the safest and most convenient way to receive a tax refund. The IRS encourages taxpayers to file when they are ready and choose direct deposit to receive any refund they may be owed.

Benefits of choosing IRS direct deposit:
It's fast.
The fastest way for taxpayers to get their refund is to file electronically and choose direct deposit.

Taxpayers who file a paper return can also choose direct deposit, but it will take longer to process the return and get a refund.
It's secure. Since refunds are electronically deposited, there's no risk of having a paper check stolen or lost in the mail.
It's easy.
Taxpayers can simply follow the instructions when selecting direct deposit as a refund method and enter their account information as directed. They must enter the correct account and routing numbers when they file.
It provides options. Taxpayers can split a refund into several financial accounts.
These include checking, savings, health, education and certain retirement accounts. They should use IRS Form 8888, Allocation of Refund, Including Savings Bond Purchases to deposit a refund in up to three accounts. This form cannot be used to designate part of a refund to pay tax preparers.
Taxpayers should deposit refunds into U.S. bank accounts in their own name, their spouse's name or both. They should avoid making a deposit into accounts owned by others. Some banks require both spouses' names on the account to deposit a tax refund from a joint return. Taxpayers should check with their bank for direct deposit rules.

09/08/2022

Know what’s deductible after buying that first home, sweet home

Making the dream of owning a home a reality is a big step for many people. Whether a fixer-upper or dream home, home ownership is a milestone that can come with a learning curve. First-time homeowners should make themselves familiar with authorized deductions, programs that can assist with home ownership and the use of housing allowances that can be beneficial.

When it comes to home ownership, the IRS considers a home to be a house, condominium, cooperative apartment, mobile home, houseboat or house trailer that contains a sleeping space, toilet and cooking facilities.

Most home buyers take out a mortgage loan to buy their home and then make monthly payments to the mortgage holder. This payment may include several costs of owning a home. The only costs the homeowner can deduct are:

state and local real estate taxes, subject to the $10,000 limit
home mortgage interest, within the allowed limits
mortgage insurance premiums
Taxpayers must file Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Income Tax Return for Seniors, and itemize their deductions to deduct home ownership expenses. However, taxpayers can’t take the standard deduction if they itemize.

Non-deductible payments and expenses
Homeowners can’t deduct any of the following items.

Insurance, other than mortgage insurance, including fire and comprehensive coverage, and title insurance
The amount applied to reduce the principal of the mortgage
Wages you pay for domestic help
Depreciation
The cost of utilities, such as gas, electricity, or water
Most settlement or closing costs
Forfeited deposits, down payments, or earnest money
Internet or Wi-Fi system or service
Homeowners’ association fees, condominium association fees, or common charges
Home repairs
Mortgage interest credit
The mortgage interest credit is meant to help individuals with lower income afford home ownership. Those who qualify can claim the credit each year for part of the home mortgage interest paid.

A homeowner may be eligible for the credit if they were issued a qualified Mortgage Credit Certificate from their state or local government. An MCC is issued only for a new mortgage for the purchase of a main home. The MCC will show the certificate credit rate the homeowner will use to figure their credit. It will also show the certified indebtedness amount and only the interest on that amount qualifies for the credit.

Homeowners Assistance Fund
The Homeowners Assistance Fund program provides financial assistance to eligible homeowners for paying certain expenses related to their principal residence to prevent mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services, and also displacements of homeowners experiencing financial hardship after January 21, 2020.

Minister's or military housing allowance
Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don’t have to reduce their deductions based on the allowance.

More information:
Publication 530, Tax Information for Homeowners
Publication 936, Home Mortgage Interest Deduction

07/20/2022

2021 tax extension filers don’t need to wait until October 17

WASHINGTON - The Internal Revenue Service is reminding the estimated 19 million taxpayers who requested an extension to file their 2021 tax return that they don’t have to wait until mid-October to file. If a taxpayer has all the necessary information to file an accurate return, they can file electronically at any time before the October deadline and avoid a last-minute rush to file.

Taxpayers who requested more time to file an accurate return have until Oct. 17, 2022. Those who have what they need to file, however, should file as soon as possible to avoid delays in processing their return.

07/06/2022

Amen!
5x over!

Daily Inspiration

04/07/2022

Why it may take longer than 21 days for some taxpayers to receive their federal refund

The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit. However, some returns have errors or need more review and may take longer to process. The IRS works hard to get refunds to taxpayers quickly, but taxpayers shouldn’t rely on getting a refund by a certain date.

Things that can delay a refund:

The return has errors, is incomplete or is affected by identity theft or fraud.
The return needs a correction to the child tax credit or recovery rebate credit amount.
The return has a claim filed for an earned income tax credit, additional child tax credit, or includes a Form 8379, Injured Spouse Allocation.
The time it takes a taxpayer’s bank or credit union to post the refund to the taxpayer’s account.
The IRS will contact taxpayers by mail if it needs more information to process their return.

The fastest way to get a tax refund is by filing electronically and choosing direct deposit. People who don’t have a bank account can learn about opening an account at an FDIC-Insured bank or the National Credit Union Locator tool.

Taxpayers can check the status of their refund online.

To check the status of a refund, taxpayers should use the Where’s My Refund? tool on IRS.gov. If taxpayers file electronically, they should wait twenty-four hours before checking the status of their refund. If taxpayers file a paper return, they should wait four weeks before checking the status.

IRS representatives on the phone and at Taxpayer Assistance Centers can only research the status of a refund if:

It’s been 21 days or more since the taxpayer filed the return electronically.
It’s been six weeks or more since the taxpayer mailed the return.
The Where's My Refund? tool tells the taxpayer to contact the IRS.

If you need assistance with tax problems or issues contact us at 205-547-0919 or email: [email protected]

COVID Tax Tip 2022-54, April 7, 2022 — The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit. However, some returns have errors or need more review and may take longer to process.

02/24/2022

Important information about your 2021 taxes

You should have received your Form 1095-A – Health Insurance Marketplace Statement in the mail. Make sure to keep it with your other important tax records, like the W-2 you get from your employer.

If you haven’t received it, you can visit HealthCare.gov to download an electronic copy of your Form 1095-A. Log into your Marketplace account HealthCare.gov, select your 2021 application, then select “Tax forms.

01/27/2022

Taxpayers beware: Tax season is prime time for phone scams

With the new tax season starting this week, the IRS reminds taxpayers to be aware that criminals continue to make aggressive calls posing as IRS agents in hopes of stealing taxpayer money or personal information.

Here are some telltale signs of a tax scam along with actions taxpayers can take if they receive a scam call.

The IRS will never:

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
Threaten to immediately bring in local police or other law enforcement groups to have the taxpayer arrested for not paying.
Demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.
Call unexpectedly about a tax refund.
Taxpayers who receive these phone calls should:

Record the number and then hang up the phone immediately.
Report the call to TIGTA using their IRS Impersonation Scam Reporting form or by calling 800-366-4484.
Report the number to [email protected] and be sure to put “IRS Phone Scam” in the subject line.

If you need income tax help call Genesis Tax Resolution to discuss your specific tax needs. 205-547-0919 or email at [email protected]

01/20/2022

Common tax return mistakes that can cost taxpayers

Tax laws are complicated but the most common tax return errors are surprising simple.
Many mistakes can be avoided by filing electronically. Tax software does the math, flags common errors and prompts taxpayers for missing information.
It can also help taxpayers claim valuable credits and deductions.
Using a reputable tax preparer – can also help avoid errors.

• Filing too early. While taxpayers should not file late, they also should not file prematurely. People who don’t wait to file before they receive all the proper tax reporting documents risk making a mistake that may lead to a processing delay.

• Missing or inaccurate Social Security numbers. Each SSN on a tax return should appear exactly as printed on the Social Security card.

• Misspelled names. Likewise, a name listed on a tax return should match the name on that person's Social Security card.

• Entering information inaccurately. Wages, dividends, bank interest, and other income received and that was reported on an information return should be entered carefully. This includes any information needed to calculated credits and deductions. Using tax software should help prevent math errors, but individuals should always review their tax return for accuracy.

• Incorrect filing status. Some taxpayers choose the wrong filing status. A professional tax preparer can help taxpayers choose the correct status especially if more than one filing status applies. Tax software also helps prevent mistakes with filing status.

• Math mistakes. Math errors are some of the most common mistakes. They range from simple addition and subtraction to more complex calculations. Taxpayers should always double check their math. Better yet, tax prep software does it automatically.

• Figuring credits or deductions. Taxpayers can make mistakes figuring things like their earned income tax credit, child and dependent care credit, child tax credit, and recovery rebate credit. The Interactive Tax Assistant can help determine if a taxpayer is eligible for tax credits or deductions. Tax software will calculate these credits and deductions and include any required forms and schedules. Taxpayers should Double check where items appear on the final return before clicking the submit button.

• Incorrect bank account numbers. Taxpayers who are due a refund should choose direct deposit. This is the fastest way for a taxpayer to get their money. However, taxpayers need to make sure they use the correct routing and account numbers on their tax return.

• Unsigned forms. An unsigned tax return isn't valid. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have a valid power of attorney. Taxpayers can avoid this error by filing their return electronically and digitally signing it before sending it to the IRS.

The IRS urges all taxpayers to file electronically and choose direct deposit to get their refund faster. IRS Free File offers online tax preparation, direct deposit of refunds.

CALL OR CONTACT GENESIS TAX RESOLUTION FOR HELP WITH YOUR 2021 TAX RETURNS OR ANY NON FILED PAST TAX RETURNS.
205-547-0919 office
[email protected]

12/30/2020

IR-2020-280, December 29, 2020

WASHINGTON – Today, the Internal Revenue Service and the Treasury Department will begin delivering a second round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans who received the first round of payments earlier this year.

The initial direct deposit payments may begin arriving as early as tonight for some and will continue into next week. Paper checks will begin to be mailed tomorrow, Wednesday, December 30.