J. M. Augsburger, CPA, LLC

04/24/2025

Did you owe the IRS this year? Concerned about next year? The IRS offers a little help with their “Tax Withholding Estimator”. Check it out!

Check your W-4 tax withholding with the IRS Tax Withholding Estimator. See how your withholding affects your refund, paycheck or tax due.

11/15/2024

For those of you who are business owners AND your business is registered with the state, you must file a BOI with FinCEN. The due date of this initial report is 12-31-24 IF you registered your business prior to 01-01-24. For new businesses registered in 2024, this must be done within 90 days of state registration.

The penalties for not doing this are severe… $500 a day up to $10,000. The $500 increases with inflation and is now up to $591.

12/30/2023

Do you have a small business and use a vehicle for it? It always gets recommended to take a picture of your odometer. Don’t bother! It never holds up in an audit. It doesn’t shows the date taken and the vehicle make/model. A better idea to audit proof your tax return for Car and Truck Expenses or Mileage is to go get your oil changed by a professional. Make sure on the receipt that the odometer reading is listed and correct along with the correct make and model of your car. Then do this again in June. Repeat every December/January. Do this for each car you use for your business.

This creates the perfect paper trail for audit proofing your tax return. Do not change the oil yourself! I know! I know! You need a third party receipt with the odometer readings, make and model and at least the beginning/end of a year and middle of the year for an audit. Mileage for 2024 is 67 cents per mile!

Please keep a mileage log of your business trips. A log kept during the year (contemporaneous log) holds up 100% better in audit than a recreated one. It can be in a book or you can use a program like mileIQ or the QuickBooks program. You want this as well you audit proof your return.

Copyright by Amy Brosnan and After the Tax Return LLC

08/24/2022

Within the Inflation Reduction Act signed by President Biden in August 2022, the additional $80 billion in funding for the IRS is appropriated over 10 years as follows:

$3,181,500,000 for taxpayer services,
$45,637,400,000 for enforcement,
$25,326,400,000 for operations support, and
$4,750,700,000 for business systems modernization

The additional revenue that will be generated from IRS enforcement efforts was estimated to be $124 billion. Small businesses are likely to bear the brunt of the enforcement efforts.

07/01/2022

Starting today, July 1st, the IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices to 62.5 cents per mile. You MUST keep a business mileage log to take an advantage of this deduction. This includes date, beginning odometer, ending odometer, and business purpose. 

One easy way to track miles is to download a mile-tracking app. There are many app options. Two popular options are Stride (free) and MileIQ ($5.99 billed monthly for unlimited trips, free for the first 40 trips). Both apps work by using the location on your phone to track mileage automatically. Both apps produce a mileage log that you can use if you are audited by the IRS.

12/08/2021

New online identity verification process for accessing IRS self-help tools

The IRS recently launched an improved identity verification and sign-in process that enables more people to securely access and use IRS online tools and applications.

Taxpayers using the new mobile-friendly verification process can access several IRS online services including:

Child Tax Credit Update Portal
Online Account
Get Transcript Online
Get an Identity Protection PIN
Online Payment Agreement
Additional applications will transition to the new process over the next year.

The new process reaches more people through the expanded use of identity documents and increased help desk assistance for taxpayers who encounter a problem when attempting to verify their identity online.

The IRS is using ID.me to provide verification services. The new process part of the IRS’s ongoing commitment to ensure that taxpayer information is only provided to the person who has a legal right to the data.

The IRS integrated this new account-creation process into some applications used by tax professionals, including those they use to request powers of attorney or tax information authorizations online using Tax Pro Account or to submit Forms 2848 and 8821 online.

Accessing IRS tools
Taxpayers will be asked to sign in with an ID.me account. If they already have IRS usernames, they can use their credentials from the old system to sign-in until summer 2022. However, they should create an ID.me account as soon as possible. Anyone with an existing ID.me account from the Child Tax Credit Update Portal, or from another government agency, can sign in with their existing credentials.

To verify their identity with ID.me, taxpayers must do two things:

Provide a photo of a driver's license, state ID or passport.
Take a selfie using a smartphone or a computer with a we**am.
Once their identity is verified, they can securely access IRS online services.

Taxpayers who need help verifying their identity or submitting a support ticket should visit the ID.me IRS Help Site

10/30/2021

If you are receiving child tax advance payments, the IRS will send you a letter 6419 in January 2022.
KEEP this letter handy when you file your tax return. If you don’t put the correct amount of the advance payment, it could hold up your refund or you could spend way too much time on the phone with the IRS to get it straightened out.

Frequently asked questions about the Advance Child Tax Credit Payments in 2021 — Topic A: General Information

08/26/2021

This week, the House of Representatives approved a roughly $3.5 trillion budget, which opens a parliamentary procedure known as budget reconciliation, a procedure used to pass the American Rescue Plan Act back in March.

While exact legislation still needs to be written, we expect to see the following tax-related implications:

Extension of the child tax credit, earned income tax credit, the child and dependent care tax credit, and paid family and medical leave

Tax increase on the top marginal rate for high-income individuals
Tax cut for Americans making less than $400,000 a year

Consumer rebates to weatherize and electrify homes

Clean energy, manufacturing and transportation tax incentives

SALT cap relief

Increased resources for IRS tax enforcement

Corporate and international tax reform

This legislation will be in addition to the Infrastructure Investment and Jobs Act. Congressional committees expect to work on both pieces of legislation in September.

08/26/2021

Child Tax Credit Portal Update

The Child Tax Credit Update Portal has new features that allow taxpayers to update their mailing address and choose to receive their payment by paper check. To have the change take effect in September, people need to complete the request before midnight Eastern Time on Monday, Aug. 30. Families can still make changes after that date, but their request will not be effective until the next scheduled monthly payment.

If taxpayers change their mailing address using the Child Tax Credit Update Portal, the IRS will use this updated address for all future IRS correspondence, so the address change feature can also be helpful to taxpayers who are receiving payments by direct deposit. For example, the IRS will mail a year-end summary statement (Letter 6419) to all taxpayers who have received advance child tax credit payments during 2021. Having a current address on file with the IRS will ensure prompt delivery of this statement.

08/27/2020

IRS Sending Refund Interest Payments

This week, the Treasury Department and the Internal Revenue Service announced they will be sending interest payments to about 13.9 million individual taxpayers who timely filed their 2019 tax returns and received refunds.

The interest payments, averaging about $18, will be made to individual taxpayers who filed a 2019 return by this year’s July 15 deadline and either received a refund in the past three months or will receive a refund. Most interest payments will be issued separately from tax refunds.

In most cases, taxpayers who received their refund by direct deposit will have their interest payment direct deposited in the same account. That amounts to approximately 12 million payments. Some tax preparers have noted that the deposit is labeled “IRS TREAS 310.”

Everyone else will receive a check. A notation on the check − “INT Amount” − will identify it as a refund interest payment and indicate the interest amount.

By law, these interest payments are taxable, and taxpayers who receive them must report the interest on the 2020 federal income tax return they file next year. In January 2021, the IRS will send a Form 1099-INT to anyone who receives interest totaling at least $10.

08/19/2020

IRS: Unemployment compensation is taxable; Have tax withheld now and avoid a tax-time surprise

WASHINGTON – With millions of Americans now receiving taxable unemployment compensation, many of them for the first time, the Internal Revenue Service today reminded people receiving unemployment compensation that they can have tax withheld from their benefits now to help avoid owing taxes on this income when they file their federal income tax return next year.

By law, unemployment compensation is taxable and must be reported on a 2020 federal income tax return. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted this spring.

Withholding is voluntary. Federal law allows any recipient to choose to have a flat 10% withheld from their benefits to cover part or all of their tax liability. To do that, fill out Form W-4V, Voluntary Withholding Request (PDF), and give it to the agency paying the benefits. Don’t send it to the IRS. If the payor has its own withholding request form, use it instead.

If a recipient doesn’t choose withholding, or if withholding is not enough, they can make quarterly estimated tax payments instead. The payment for the first two quarters of 2020 was due on July 15. Third and fourth quarter payments are due on Sept. 15, 2020, and Jan. 15, 2021, respectively. For more information, including some helpful worksheets, see Form 1040-ES and Publication 505, available on IRS.gov.

Here are some types of payments taxpayers should check their withholding on:

Unemployment compensation includes: Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund
Railroad unemployment compensation benefits
Disability benefits paid as a substitute for unemployment compensation
Trade readjustment allowances under the Trade Act of 1974
Unemployment assistance under the Disaster Relief and Emergency Assistance Act of 1974, and
Unemployment assistance under the Airline Deregulation Act of 1978 Program
Recipients who return to work before the end of the year can use the IRS Tax Withholding Estimator to make sure they are having enough tax taken out of their pay. Available only on IRS.gov, this online tool can help any worker or pension recipient avoid or lessen their year-end tax bill or estimate the refund they want.

In January 2021, unemployment benefit recipients should receive a Form 1099-G, Certain Government Payments (PDF) from the agency paying the benefits. The form will show the amount of unemployment compensation they received during 2020 in Box 1, and any federal income tax withheld in Box 4. Taxpayers report this information, along with their W-2 income, on their 2020 federal tax return. For more information on unemployment, see Unemployment Benefits in Publication 525.

07/17/2020

Are you turning 70 1/2 in 2020? This is for you...

Issue Number: IR-2020-162

IRS: Seniors, retirees not required to take distributions from retirement accounts this year under new law

WASHINGTON — The Internal Revenue Service today reminds seniors and retirees that they are not required to take money out of their IRAs and workplace retirement plans this year.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, waives required minimum distributions during 2020 for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020. Roth IRAs do not require withdrawals until after the death of the owner.

What if I already took my RMD?

If an individual has already taken an RMD in 2020, including someone who turned 70 ½ during 2019, the individual will have the option of returning the distribution to their account or other qualified plan.

Since the RMD rule is suspended, RMDs taken in 2020 are considered eligible for rollover. Therefore, RMDs can be rolled over to another IRA, another qualified retirement plan, or returned to the original plan.

An IRA owner or beneficiary who has already received an RMD in 2020 can also repay the distribution to the distributing IRA no later than Aug. 31, 2020, to avoid paying taxes on that distribution.

IRS Notice 2020-51 also provides that the one rollover per 12-month period limitation and the restriction on rollovers to inherited IRAs do not apply to this repayment.

The CARES Act provisions apply to most retirement plans, including traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, profit sharing plans and other defined contribution plans. The RMD suspension does not apply to qualified defined benefit plans.

Where can I find more information?

More information on the CARES Act and retirement plans, including FAQs, can be found on at Coronavirus-related relief for retirement plans and IRAs questions and answers.

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