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Shikha Varshney, CPA PC

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Shikha Varshney, CPA PC

Expert in Tax Returns and Planning, Entity Formation, Quickbooks, Bookkeeping and Payroll Services.

08/09/2023

Summer Life Events and Taxes – Did You Know? (2/2)

People often make life changes during the summer, both short-term and long-term. Many of these changes may require adjustments to your tax planning, and some create opportunities for significant tax savings.

Students who work part-time over the summer may have more federal income tax withheld from their pay than they owe. Make sure that working youngsters in your home are prepared to file a federal tax return next spring to claim any refund they have coming. Taxpayers of all ages who take on gig economy work should also be aware that they may owe self-employment tax. In general, any extra income may necessitate adjusting your withholding or estimated tax payments. The IRS Withholding Estimator tool (link below) can help you with the calculations.

Summer home improvements projects that reduce energy use, like installing Energy Star-certified windows, may make you eligible for the Energy Efficient Home Improvement Credit. Tax credits also exist for clean energy conversions, like installing rooftop solar panels. All of these tax-reducing opportunities require carefully documenting each expense.

A tax professional can help you determine whether you qualify for tax savings based on your summer activities.

IRS Withholding Estimator: https://www.irs.gov/individuals/tax-withholding-estimator

07/31/2023

Summer Life Events and Taxes – Did You Know? (1/2)

People often make life changes during the summer, both short-term and long-term. Many of these changes may require adjustments to your tax planning, and some create opportunities for significant tax savings.

If you get married this summer or fall, taking a few steps now will help keep your tax filing simple next spring. First, make sure to report any name changes to the Social Security Administration. Second, if your new life together involves a relocation, notify the IRS of your new address. Also remember that marriage means a change in your tax filing status, which may necessitate an adjustment to your tax withholding or estimated tax payments. The IRS Withholding Estimator (link below) can help you stay on track.

Summertime can also mean paying for additional childcare so you can work, or sending your kids to summer camps. If you qualify, you may be able to claim the Child and Dependent Care Credit for a portion of these expenses. A tax professional can help you determine how summer life changes may affect your taxes, and how to best take advantage of tax saving opportunities.

IRS Withholding Estimator: https://www.irs.gov/individuals/tax-withholding-estimator

07/26/2023

Educator Expense Deduction – Did You Know?

If you are an eligible educator, you may deduct up to $300 from trade or business expenses. Joint return filers who are both educators may deduct up to $300 per spouse.

You may qualify for this deduction if you work as a teacher, counselor, principal or aide for grades K-12 in a public or private school. You generally must work at the school for at least 900 hours during the school year.

Eligible classroom expenses include:
- Books, supplies and materials that you purchase for classroom use
- Classroom equipment, including computers, peripherals and software
- Items such as hand sanitizer and masks purchased to prevent the spread of COVID-19

Tuition and fees for professional development courses may also qualify for the Educator Expense Deduction. However, you may get a larger tax benefit by claiming the Lifelong Learning Credit or a different deduction for these costs. A tax professional can help you find the most advantageous way to report all your qualified expenses.

07/19/2023

Hobby or Business - Did You Know?

Recent years have seen a rise in the number of people pursuing “side hustles,” such as delivery driving, dog walking and online craft selling. Many of these activities could be classified as either hobbies or business ventures, depending on how you pursue them. Since different tax rules apply for businesses and hobbies, it is important to know how the IRS will likely classify your side gig. The IRS considers a variety of questions, including:

- Do you depend on the activity for your livelihood?
- Do you pursue the activity in a professional, businesslike manner, and keep detailed records?
- Is the activity currently profitable for you, and if not, is there good reason to believe it will become consistently profitable in future years?
- Do you have the knowledge and skills needed to pursue the activity as a business?
- Do you approach the activity in a way that shows the intent to make a profit, such as changing methods to boost revenues?

In many cases, business income is subject to both income and self-employment tax, whereas hobbies may be subject to income tax. However, pursuing an activity as a business may enable you to reduce your taxable income by deducting business expenses, such as supplies, business vehicle use, and home office costs. A tax professional can help you determine how your side gigs should be classified, and how to account for that classification in your tax planning.

07/11/2023

Unclaimed 2019 Tax Refunds – Did You Know?

The IRS estimates that 1.5 million Americans are entitled to 2019 federal tax refunds that they have not claimed. The deadline to still file a 2019 return is July 17, 2023 and after that date, any unclaimed refunds become the property of the U.S. Treasury.

Even if you owed little or no tax for 2019, you may still be entitled to an IRS refund if you qualified for a refundable tax credit, such as the Earned Income Tax Credit (EITC) or Affordable Care Act Premium Tax Credit (PTC). The IRS estimates that not including refundable credits, the median unclaimed 2019 refund is $893, which means that half of the available refunds are greater than that amount.

A tax professional can help you determine your eligibility for 2019 tax credits, prepare a 2019 tax return and file the return.

07/07/2023

New Identity Theft Mail Scam – Did You Know?

Scammers constantly develop new ways to impersonate the IRS and steal the money and/or identities of taxpayers. Most often, these scams come in the form of text messages, emails or phone calls. However, the IRS recently issued a new warning about a scam that uses traditional mail delivery.

In this new scam, taxpayers receive a letter by postal mail, or in a cardboard envelope from another delivery service. Printed on what appears to be IRS letterhead, the letter states that the taxpayer has an unclaimed tax refund. However, the phone number and address shown do not belong to the IRS. The letter asks the taxpayer for sensitive personal information, including their Social Security number (SSN), telephone number and photos of their driver's license. The scammers then use this information to steal the person's identity.

Legitimate IRS letters do not ask for personal information in this way. The scam letters also often have awkward phrases like, "Try to be watching your email." If you receive a suspicious letter that claims to be from the IRS, do NOT respond. Instead, call a legitimate IRS phone number, such as 800-829-1040, to find out whether the notice is genuine.

06/28/2023

Business Travel Expense Deductions – Did You Know?

If you have business income, including earnings from self-employment activities like freelance, independent contract or gig economy work, you may be able to deduct business travel expenses on your tax return. In general, the expenses must relate to travel by you or one of your employees for business (not personal) purposes. The expenses also cannot be extravagant; they should be ordinary and necessary for your trade or business.

Potentially deductible expenses may include:
- Air, train or bus fare, or costs associated with traveling by personal or company car
- Fares (including tips) for taxi or rideshare services between an airport or train station and a hotel, or between a hotel and a work location
- Shipping costs for baggage, display materials or product samples
- Expenses (including tips) for lodging, meals, dry cleaning or laundry services
- Communication costs, such as business mobile phone service roaming charges

The IRS requires business travelers to maintain detailed records of all deductible expenses. A business tax professional can help you identify and document your eligible business travel expenses, so that you can claim your full deduction while staying within the rules.

06/21/2023

Summer Income Tax Reminder - Did You Know? (2/2)

Americans of all ages with summer income from self-employment may need to pay estimated tax on a quarterly basis in order to avoid IRS penalties. Alternatively, if you have self-employment earnings but also work as an employee, the IRS Withholding Estimator tool (link below) can help you determine the correct withholding amount to cover your income and self-employment tax responsibilities.

You may also qualify to reduce your tax by deducting business expenses. A tax professional can help you comply with record keeping requirements, and fully prepare for any tax implications of your summer endeavors.

IRS Withholding Estimator: https://www.irs.gov/individuals/tax-withholding-estimator

06/12/2023

Summer Income Tax Reminder - Did You Know? (1/2)

Students and other people who earn summer income, including gig economy and other self-employment income, should prepare now for potential federal tax obligations.

They may normally have taxes withheld from their paychecks by their employer after filling out a Form W-4. However, if the job is regarded as self-employment, like baby-sitting or lawn care can be, they should keep good records of all expenses to help maximize potential deductions.

In the case of lawn care, potential deductible expenses may include business cards, fliers, fuel, equipment rentals, chemicals, work mileage, etc.

In addition, minors and young adults with self-employment earnings (including gig economy income) of at least $400 must file a federal tax return and may owe self-employment tax in addition to federal income tax. A tax professional can help advise on potential deductible expenses and required tax filings.

06/07/2023

Overseas Tax Filing & Quarterly Installment Deadlines - Reminder

If you are a U.S Citizen or Green Card Holder living abroad and have not filed your taxes yet, the deadline is coming up on June 15th, 2023.

If you are making quarterly estimated tax payments to the IRS, the due date for the April 1 – May 31 quarter of year is also June 15th.

For payments made using IRS Direct Pay, you can make payments until 11:45PM EST, and for payments using a credit or debit card, payments can be made up to midnight on the due date.

05/31/2023

Business Accessibility Tax Credits – Did You Know?

The IRS offers a variety of tax benefits for businesses that improve accessibility for people with disabilities and/or hire workers with disabilities. Small businesses with 30 or fewer full-time employees and annual revenues of $1 million or less may qualify to claim the Disabled Access Credit. The maximum credit amount is 50% of the cost of access improvements such as ramps, automatic doors and interpretive services like braille signage or audio interfaces.

Businesses of all sizes may also qualify for the Barrier Removal Tax Deduction. This program enables businesses to deduct up to $15,000 a year for eligible expenses to remove barriers that make it difficult for people with disabilities and the elderly to move around facilities. Ordinarily, businesses must depreciate such construction costs over a number of years.

In addition, businesses that hire veterans, workers with disabilities or other people who traditionally face obstacles to employment may qualify for the Work Opportunity Tax Credit. This credit may amount to as much as 40% of a qualifying employee's first-year wages.

A business tax professional can help you develop a strategy to take advantage of all the tax benefits available for boosting the accessibility of your business.

05/24/2023

National 529 Day on Monday, May 29th - Did You Know?

If you put money in a 529 account for education, withdrawal of earnings are tax-free if used for qualified educational expenses. Qualified educational expenses include tuition, fees, housing, meals and books. Many states offer a full or partial tax deduction for 529 plan contributions. They may also offer incentives and promotions to encourage families to open and contribute to 529 accounts this coming Monday for National 529 Day.

The 2017 Tax Cuts and Jobs Act (TCJA) also expanded eligibility for 529 savings plans. Up to $10,000 per year may be used for Kindergarten through Grade 12 education (public, private, or religious schools).

Address

26606 Cook Field Road, Suite 200
Katy, TX
77494

Opening Hours

Monday	9am - 5pm
Tuesday	9am - 5pm
Wednesday	9am - 5pm
Thursday	9am - 5pm
Friday	9am - 6pm
Saturday	9am - 2pm

Telephone

908-463-0997

Website

https://www.svcpaus.com/

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