E.L.M Accounting, Payroll & Tax Services INC

E.L.M Accounting, Payroll & Tax Services INC Contact information, map and directions, contact form, opening hours, services, ratings, photos, videos and announcements from E.L.M Accounting, Payroll & Tax Services INC, Tax preparation service, 10474 Armstrong Street STE 209, Fairfax, VA.

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2020 Charitable Contributions Deduction – Did You Know?Ordinarily, only taxpayers who itemize deductions may deduct char...
12/07/2020

2020 Charitable Contributions Deduction – Did You Know?

Ordinarily, only taxpayers who itemize deductions may deduct charitable contributions on their federal tax returns. However, the CARES Act allows many people who do not itemize to claim a deduction for 2020 cash contributions to IRS-approved charities. Tax deductions lower a person's tax bill by reducing taxable income.

In general, individuals and couples who do not itemize deductions may deduct up to $300 for cash contributions made to qualifying charitable organizations in 2020. Qualifying organizations include many nonprofits dedicated to educational, religious, literary, and disaster and hunger relief activities. The IRS provides an online search tool (link below) to help taxpayers determine whether a particular charity qualifies to receive tax-deductible donations.

As a reminder for those who do itemize deductions, the CARES Act also sets the 2020 cash contributions itemized deduction limit at 100% of adjusted gross income (AGI) for most taxpayers, a temporary increase from the usual limit of 60% of AGI. Qualifying 2020 cash contributions in excess of the limit may be carried over as deductions for tax year 2021.

A tax professional can help you determine whether your contributions qualify for these special rules, and how to claim your deduction if so.

IRS Charitable Organizations Search Tool: https://www.irs.gov/charities-non-profits/tax-exempt-organization-search

Giving Tuesday and Charitable Donations - Did You Know?Giving Tuesday is an annual event that highlights charitable givi...
12/01/2020

Giving Tuesday and Charitable Donations - Did You Know?

Giving Tuesday is an annual event that highlights charitable giving after Thanksgiving.

If you are considering charitable donations, you may be able to donate to a Donor-Advised Fund (DAF) every two or three years instead of every year. This may qualify you to receive tax benefits now, allow the amount to grow tax-free, and the decision on which qualified charity to fund can be made later.

If you are 70.5 years or older, you may also be able to make a qualified charitable distribution (QCD) directly from your IRA this year. QCDs may allow the donation to be deducted from your income. A tax advisor can help you structure your charitable giving.

The IRS has released a tool to make it easier to get information about qualified charitable organizations. The Exempt Organizations Select Check tool can be found at: https://www.irs.gov/charities-non-profits/tax-exempt-organization-search.

Paying Estimated Tax to Avoid Penalties – Did You Know?With more and more people deriving income from a variety of sourc...
11/16/2020

Paying Estimated Tax to Avoid Penalties – Did You Know?

With more and more people deriving income from a variety of sources, including side jobs, self-employment and “gig economy” work, the IRS has reported a substantial increase in the number of Americans who underpay federal income tax during the year. Underpayment can lead to an unpleasant spring tax surprise, including substantial penalties and interest charges.

If a significant portion of your income is not subject to paycheck withholding, you may need to make quarterly estimated tax payments to avoid incurring an Estimated Tax Penalty for 2020. Common income types that may necessitate making estimated tax payments include:

- Business income, which includes rental income, as well as income from self-employment and “gig economy” work (working for a rideshare service, mowing lawns, etc.)
- Royalties and grants, including grants in support of artistic or educational endeavors
- Interest, dividend and alimony payments
- Unemployment Insurance (UI) and Social Security benefits

It is critical for those who have received UI benefits in 2020 to learn whether they must make estimated tax payments before the year ends. Many state unemployment agencies have not withheld taxes from the federal $600-per-week federal UI benefit that was paid under the CARES Act from late March through July, or from the temporary $300 weekly federal UI payment recently implemented by Executive Order. Therefore, even those who had tax withheld from their UI benefits may not have paid enough in federal taxes to avoid penalties.

The IRS encourages Americans who have received any form of non-employee income in 2020 to do a midyear tax checkup, and begin making estimated tax payments immediately if necessary. The third-quarter estimated tax payment deadline was September 15, 2020, but those who missed the deadline can minimize penalties by making a payment as soon as possible. Fourth-quarter estimated tax payments are due January 15, 2021, although taxpayers may generally skip the fourth-quarter payment if they file a 2020 return and pay all tax due by February 1, 2021.

In most cases, taxpayers will avoid 2020 tax penalties if their paycheck withholding and/or estimated tax payments for the year add up to at least 90% of their 2020 tax, or 100% of their 2019 tax, whichever is lower. A tax professional can help you determine whether you need to make estimated tax payments this year, along with when and how much to pay.

IRS online payment portal: https://www.irs.gov/payments

Renewing ITINs - Did You Know?Individual Taxpayer Identification Numbers are used for taxpayers who are required for U.S...
11/11/2020

Renewing ITINs - Did You Know?

Individual Taxpayer Identification Numbers are used for taxpayers who are required for U.S. tax purposes to have a U.S. taxpayer identification number but do not qualify to get a social security number.

If you use an ITIN, you should check if it expires this year. If it does, information about how to renew your ITIN can be found at: https://www.irs.gov/credits-deductions/individuals/how-do-i-renew-my-itin. Keeping your ITIN current helps avoid tax refund and processing delays.

Taxpayers who have not used their ITIN to file a federal return at least once in the last three years will see their number expire Dec. 31, 2020. ITINs with middle digits 90, 91, 92, 94, 95, 96, 97, 98 or 99, that were assigned before 2013 and have not already been renewed, will also expire at the end of the year.

Watch Out for Disaster-Related Charity and Tax Scams – Did You Know?The IRS has warned taxpayers about new and ongoing s...
11/02/2020

Watch Out for Disaster-Related Charity and Tax Scams – Did You Know?

The IRS has warned taxpayers about new and ongoing scams targeting both people affected by natural disasters and those seeking to help disaster victims. In many of these fraudulent schemes, the scammers impersonate IRS representatives or charitable organizations.

SCAMS INVOLVING BOGUS OFFERS OF TAX ASSISTANCE

Taxpayers impacted by federally declared disasters like hurricanes and wildfires may qualify for various forms of tax relief, such as deductions for casualty losses. Knowing this, some scammers are calling taxpayers in disaster-affected areas, claiming to represent the IRS. They may say that they can help people get tax refunds or file claims for their losses.

DO NOT give any money or personal or financial information to these scam callers. The IRS generally does not call taxpayers out of the blue about tax relief programs. Hang up on any unknown callers who say they can offer you disaster-related tax assistance.

What to DO: To learn whether you qualify for tax relief or to seek help with other disaster-related tax issues like reconstructing lost records, call the IRS disaster assistance line directly at 866-562-5227.

SCAMS INVOLVING BOGUS CHARITIES

Unfortunately, many scammers try to prey upon generosity by posing as representatives of charitable organizations that help people affected by disasters. These fake charities may have official-looking websites with names similar to legitimate charities, making it difficult for consumers to spot the scam.

DO NOT make an over-the-phone contribution without first making sure that the charity is legitimate. Also do not donate using forms of payment that cannot be tracked, such as wire transfers, gift cards or signing over a tax refund or stimulus check. Most importantly, do not give out personal information like your Social Security Number (SSN) or bank account numbers.

What to DO: Ask for more information so you can check up on the supposed charity. One of the best ways to determine whether the caller is a scammer is to ask for the charity's Employer Identification Number (EIN). You can then search IRS records of reputable charities by entering the EIN into the Tax Exempt Organization Search Tool (link below). If you determine that it is safe to donate, pay by check or credit card so you will have a record of the payment. You may also wish to ask the caller to direct you to the charity's website, so that you can donate through a secure online portal rather than over the phone.

IRS Tax Exempt Organization Search Tool: https://apps.irs.gov/app/eos/.

Social Security Tax Deferral May Change Your Withholding – Did You Know?An Executive Order issued in August allows U.S. ...
10/28/2020

Social Security Tax Deferral May Change Your Withholding – Did You Know?

An Executive Order issued in August allows U.S. employers the option to defer collection of the employee's share of Social Security tax between September 1, 2020 and December 31, 2020. The employee's share of this tax makes up the majority of paycheck withholding labeled as FICA on most worker pay stubs.

Importantly, the Executive Order only authorizes DELAYED collection, rather than an actual reduction or temporary elimination of the tax. Most employers that choose not to withhold Social Security tax during the specified four-month period will need to collect the deferred tax through extra withholding after January 1, 2021. In other words, employees of these companies will have less money withheld from their paychecks this fall (resulting in increased net pay), but their net pay may decrease for several months after January 1 due to makeup withholding.

For this reason, many employers have opted to continue withholding all FICA taxes as usual. The simplest way to determine whether your employer might be deferring Social Security tax collection is to save your pay stubs from August, and compare them to your pay stubs during the fall. If you see no significant change in your FICA withholding and net pay, then your employer has most likely opted out of delayed withholding.

On the other hand, a decrease in the withholding amount and increase in your net pay may indicate that Social Security tax has not been withheld. You can check with your company's payroll department to make sure. Some companies may offer employees the choice to individually opt out of deferred withholding. However, under the Executive Order, deferred withholding may be mandatory for military and federal government employees with incomes below specified limits.

If your Social Security tax withholding is delayed under this program, you may wish to take steps now to prepare for a potential increase in withholding and decrease in net pay during early 2021. For example, you could set aside the extra money you receive each pay period this fall as savings. A professional tax and financial advisor can help you explore other options to ensure that you are prepared for any possible upcoming changes to your net pay.

Lifetime Learning Credit – Did You Know?The IRS Lifetime Learning Credit (LLC) can offer substantial tax savings for stu...
10/19/2020

Lifetime Learning Credit – Did You Know?

The IRS Lifetime Learning Credit (LLC) can offer substantial tax savings for students or their parents, especially for students who have previously completed four years of higher education. If you paid tuition and school fees in 2020 for yourself, your spouse or a dependent, you may be able to claim an LLC of up to $2,000 on your 2020 tax return. Generally, you may only claim the credit for one member of your household per year.

Students currently taking post-secondary education classes at eligible higher learning institutions may qualify for this credit by meeting BOTH of the following criteria:

- They are or were enrolled in higher (post-secondary) education classes for at least one 2020 academic period. An academic period can be a semester, quarter, trimester, summer session, or any other coursework session defined by the school.
- The student is taking these higher education classes in pursuit of a degree or other recognized certification, or to acquire or improve job skills.

In addition, the taxpayer claiming the credit (usually the student or the student's parent or guardian) must meet the program's income restrictions. Taxpayers with a modified adjusted gross income (MAGI) of $58,000 or less ($116,000 or less for joint filers) generally qualify to claim the full credit. Taxpayers with a MAGI between $58,000 and $68,000 ($116,000 and $136,000 for joint filers) may receive a reduced credit; those with higher incomes cannot claim the LLC.

Although the LLC may only be claimed once per tax return, there is no limit to how many times students can qualify for the credit during their lifetimes. Before claiming the LLC for a student in your household, however, check whether the student qualifies for the American Opportunity Tax Credit (AOTC). The AOTC has higher income limits and a higher maximum credit amount ($2,500). In addition, unlike the LLC, the AOTC may be partially refundable if your tax is reduced to less than zero.

For students who do not qualify for either the AOTC or LLC, it may still be possible to claim an above-the-line income deduction for tuition and fees. A professional tax advisor can help you determine your eligibility for these valuable education tax credits and deductions.

IRS Extends Deadline to Register for Stimulus Payments – Did You Know?The IRS has extended the deadline for some America...
10/14/2020

IRS Extends Deadline to Register for Stimulus Payments – Did You Know?

The IRS has extended the deadline for some Americans to register to receive their 2020 coronavirus Economic Impact Payments (EIPs, also called stimulus payments). The new deadline of midnight on November 21, 2020 primarily applies to those who are not required to file federal income tax returns, and also have not yet registered for or received their EIPs.

Those who meet these criteria are urged to use the IRS online non-filers registration tool (link below) to submit their information and receive their EIPs as soon as possible. Choosing the direct deposit option will speed up the payment process. Generally, those who do not provide banking information for direct deposit will receive their stimulus payments by check.

Note that for most people who are required to file a 2019 tax return but requested an extension, the deadline to file remains October 15. Federal return filers who qualify for EIPs generally receive their payments automatically; no separate registration is required.

Beginning two weeks after they register to receive a payment, those who qualify for EIPs can track the status of their payments by using the online Get My Payment tool (link below).

IRS EIP Registration Tool for Non-Filers: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

IRS Get My Payment EIP Tracking Tool: https://www.irs.gov/coronavirus/get-my-payment

Extensions and FBAR Deadline - Did You Know?For taxpayers who requested extensions to file various 2019 returns, the fil...
10/07/2020

Extensions and FBAR Deadline - Did You Know?

For taxpayers who requested extensions to file various 2019 returns, the filing due date for those returns is October 15, 2020. This deadline applies to multiple filings that were originally due on April 15, 2020. (For most of these forms, the filing due date without an extension was subsequently changed to July 15, 2020 by the IRS due to the COVID-19 pandemic.)

The October 15 deadline to file under an extension applies to several common returns, including:

2019 INDIVIDUAL INCOME TAXES:

Most individual taxpayers who requested an automatic extension to file their 2019 federal tax returns must file by October 15. However, additional extensions may be available to some taxpayers affected by recent disasters, including hurricanes and western wildfires.

2019 CORPORATE INCOME TAXES:

The October 15 deadline also applies to C corporations that requested an extension to file their 2019 corporate income tax returns (Form 1120).

FOREIGN BANK ACCOUNT REPORT (FBAR):

Many U.S. taxpayers, including individuals and businesses, must file an annual report of their foreign bank and other financial accounts, called an FBAR. Typically, filing an FBAR is necessary if the total value of a taxpayer's foreign accounts exceeds $10,000 at any time during the calendar year. However, certain accounts, such as those held within a qualified IRA or other retirement plan, may not need to be reported. Most taxpayers who are required to file a 2019 FBAR and have not yet done so must file by October 15.

Remember that in general, an extension to file tax returns is NOT an extension to pay any tax due. Therefore, those who have not yet filed but expect to owe 2019 tax should estimate the amount they owe and pay that amount as soon as possible, even if they will not file their returns until October 15. Immediate payment will minimize any interest charges and late payment penalties. A tax professional can help you determine how much to pay and/or if an FBAR is required.

AOTC Tuition Credit Offers Tax Savings for Students or Parents – Did You Know?If you, your spouse or any of your depende...
09/28/2020

AOTC Tuition Credit Offers Tax Savings for Students or Parents – Did You Know?

If you, your spouse or any of your dependents are currently enrolled in a higher education program, or were enrolled for a previous academic period in 2020, you may qualify for the American Opportunity Tax Credit (AOTC). The AOTC program allows eligible taxpayers to claim a credit for tuition costs and certain school fees.

To qualify for the credit, a student must be taking post-secondary classes at an eligible higher learning institution, in pursuit of a degree or other recognized certification or credential. In addition, students must meet ALL of the following eligibility requirements:

- They are or were enrolled at least half time for at least one academic period (as defined by the school) in 2020.
- They had not completed their first four years of higher education as of January 1, 2020.
- Neither the AOTC nor its predecessor, the Hope credit, has been claimed more than four times total for the student, including the current year.
- The student and the person claiming the credit (if different from the student) must have a valid taxpayer identification number (TIN) before the due date for the tax return.

Additional eligibility criteria may apply to both the student and the educational institution. To claim the full credit, taxpayers must have a modified adjusted gross income (MAGI) of $80,000 or less for individuals, or $160,000 or less for couples filing jointly. A reduced credit may be available for individual taxpayers with a MAGI between $80,000 and $90,000 (between $160,000 and $180,000 for joint filers). Those with higher incomes may not claim the credit.

The maximum allowed credit per eligible student is $2,500, up to $1,000 of which may be refundable. You may claim the credit for multiple students in your household if they all meet the eligibility standards. For students who do not qualify, you may still be able to claim either the Lifetime Learning Credit or an above-the-line income deduction for tuition and fees. A tax professional can help you determine which credits and/or deductions provide the greatest tax benefit for you.

Address

10474 Armstrong Street STE 209
Fairfax, VA
22030

Opening Hours

Monday 09:00 - 19:00
Tuesday 09:00 - 19:00
Wednesday 09:00 - 19:00
Thursday 09:00 - 19:00
Friday 10:00 - 19:00
Saturday 10:00 - 18:00

Telephone

(703) 517-8043

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