Hughes Accounting and Tax Service, LLC

03/14/2025

Enjoy π day

03/11/2025

Key Takeaways

Tax deductions and tax credits can both help you save money on taxes, but they work in different ways.
Tax deductions reduce how much of your income is taxed, while tax credits directly reduce your tax bill dollar for dollar.
Deductions and credits are both extremely valuable, but figuring out which is more valuable depends on your financial situation, tax bracket and expenses throughout the year.
You can maximize your savings by claiming all the deductions and credits you qualify for. Working with a trustworthy tax pro or using a solid tax filing software can keep you from missing out on any tax savings.

For more detailed info visit: https://www.ramseysolutions.com/taxes/tax-deductions-vs-tax-credits?utm_medium=email&utm_source=promotional&utm_term=rplus_bu&utm_campaign=tax-one-off-evergreen&utm_content=trusted-68523_rplus-tax-mar-deductions-credits-rplus-give&_kx=kpy1ocFOij9KVSsujZhM7skGKlIs4aNbW8gl2BIfdY0.RzHn5B

03/04/2025

We continue to move to an online world. The use of apps, online banking, online bill payments, etc.—it all means we have more information “out there” in cyberspace. Where information lies, generally there are scammers looking to steal that information. In the tax world, the IRS continues to publish warnings for taxpayers about the multiple tax scams attempting to gain access to personal information, steal tax refunds or rip off individuals. The IRS publishes the “Dirty Dozen” of tax scams, which you can review here. Some of the prominent techniques garnering attention are:

Phishing & Smishing: The IRS warns that especially during tax season scammers target people with realistic-looking emails (“phishing”) and texts (“smishing”) about tax returns and refunds. The texts often contain links to phony IRS websites. Specifically, spear phishing/smishing is on the rise, which is a trick using the IRS logo and a variety of subject lines such as “Action Required: Your account has now been put on hold.” The IRS has observed similar bogus communications that claim to be from a “tax preparation application provider.” One such variation offers an “unusual activity report” and a solution link for the recipient to restore their account. Tax preparers are also becoming targets, with scammers trying to pose as new clients so they can hack into the tax preparer’s system to gain client data.
These scams attempt to gather your private information or maybe even to file a false return to gain your refund. The IRS specifically states that it will NEVER initiate contact with a taxpayer regarding a tax bill or refund via text or email. If you use a tax preparer, ask them about their security procedures to protect your information. Remember, if you receive unsolicited digital contact, its likely a scam. Don’t click on unknown links, and review the email address to make sure it’s accurate.

“Helpful” Scammers: To help taxpayers, the IRS has made opening your online account very simple by going to Online Account at IRS.gov. In that account you can gather some of your individual tax information, and in some simpler cases, file your tax return for free. Because this area has valuable information, scammers are trying to gain access to these accounts. The typical scam is a third party offering “help” to create your online account. In doing so they gain access to your name, social security number, photo identification, etc. Sometimes these scammers will even charge a fee for their “help.”
The IRS reminds taxpayers that the only place to create an online account is at the IRS.gov website. Moreover, the Service stresses that there should be no need to seek third-party assistance as the process is simple, and it reminds us that the IRS will never ask for payment to open these accounts.

The IRS is asking for your help to stop these scammers. It asks that if you receive a suspected fraudulent message that you, the taxpayer, should take a screenshot of the message and include the screenshot in an email to [email protected] with the following information:

• Date/time/time zone in which the message was received
• Phone number that received the text message

For other fraudulent concerns, the IRS asks that you report an abusive tax scheme using the online Form 14242 – Report Suspected Abusive Tax Promotions or Preparers, or mail or fax a completed Form 14242 PDF and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

The IRS also offers suggestions and resources to help you as well. It recommends the following precautionary steps:

• Protect your personal data. Don’t routinely carry your Social Security card, and make sure your tax records are secure. Treat your personal information like you do your cash; don’t leave it lying around.
• Always use security software with firewall and anti-virus protections. Make sure the security software is always turned on and can automatically update. Encrypt sensitive files such as tax records you store on your computer. Use strong and varied passwords, and make sure your tax preparer has similar protections.

There are recommended links to review as well. To learn additional steps you can take to protect your personal and financial data, visit Taxes. Security. Together.

If you are getting a refund, make sure you get it! Remain diligent when managing your tax preparations, and if something seems “phishy” from the IRS, trust your instincts and question what’s going on to help avoid being scammed.

02/11/2025

Tax avoidance is legal. Don’t pay more than you have to.

Tax evasion is illegal. Don’t try to hide what you have.

Tax season is underway and there is such a thing as tax avoidance. The Money Guy, Brian Preston, has details. brings you the important stuff like ...

02/09/2025

Be careful! The IRS will never call or text you.

Scammers impersonating the IRS are texting taxpayers leading them to believe they're going to receive an economic impact payment, also known as a recovery rebate credit, but it's a scheme to steal their personal data, TIGTA said on Jan. 28.

02/07/2025

1. Understand the Nuances
Before filing, you should understand some nuances about the American tax system.

First, you’ll need to know your tax bracket. Your tax bracket determines how much you pay in taxes, and it depends on your income. In the U.S., we have a progressive tax system, which means people with higher taxable incomes are subject to higher tax rates. Knowing your tax bracket will help you plan for your taxes and prevent a nasty surprise.

Next, you should understand tax credits and deductions. Deductions represent expenses you’ve incurred that reduce your taxable income. Credits represent dollar-for-dollar reductions in your tax bill. As you prepare your taxes, keep an eye out for deductions and credits for which you may be eligible.

2. Keep Good Records
No matter how you file, you should keep good records of all your tax returns and their associated documentation. This is vital not only for filing but also in case you get audited. Typically, the IRS has three years to decide whether or not to audit a return, so save your documentation for at least that long. There are other unique instances when this time limit should be longer, so consider checking in with a tax professional about your unique circumstances.

3. Consider Itemizing — If It Works for You
Itemizing your expenses is the process of taking all the unique tax deductions for which you qualify. On the other hand, you could take the standard deduction, which is one rate for all the potential deductions for which you may be eligible; this is a common practice, because it makes tax preparation go faster, but may lead to you missing out on deductions.

Depending on your situation, you may want to itemize your expenses, especially if you have deductions over the standard deduction amount. Things like charitable donations, medical bills, and self-employment expenses may make itemizing work better for you.

4. Understand Your Withholding
Your withholding is the amount of federal income tax withheld from your paycheck. It depends on your income, or the information provided by you in your Form W-4. You’ll want to ensure that your withholding is as close as possible to the amount you’ll owe during tax season. Otherwise, you’ll be getting too much or too little taken out, neither of which is the ideal scenario.

If you ended up with a larger tax bill than expected, you may want to increase your withholding. If you got a large refund, but would prefer that money be in your check week-to-week, consider decreasing your withholding.

5. Take Advantage of Pre-Tax Opportunities and Employer Matches
If your workplace offers a 401(K) or other retirement plan, take advantage of it. That is an opportunity to put money away pre-tax. Similarly, if it offers a retirement match, do your best to meet that match — it’s an opportunity to get extra money, directly to your accounts.

Other opportunities to take advantage of include an IRA, a flexible spending account, a health savings account, and more. If these may work for your lifestyle and savings goals, talk to a professional about setting them up and utilizing them.

6. Remember Major Life Events
Getting married? Have a baby? Moving? All these things — and more — can impact your tax situation. Be sure to stay on top of the administrative tasks associated with these major changes, like legally changing your name if you desire, changing your filing status, getting Social Security numbers for new dependents, and more. These administrative tasks may feel like not a big deal, but they can make a difference come tax season.

7. File State Taxes, Too
Don’t forget your state taxes! Most states — including Ohio — require state and school district taxes to be filed, too. The exact filing deadlines may be different from federal deadlines, so be sure to check your state’s requirements. (In Ohio, state and local taxes are due April 15, alongside federal taxes.)

8. Work with a Professional
Feeling overwhelmed? Have a complicated tax situation? Just want peace of mind? There are plenty of reasons to work with a professional on your taxes, even if you feel your taxes are simple. Working with a professional tax professional can reduce stress and errors in your tax filing, plus a professional can help you with tax planning and strategies, too.

02/06/2025

We are in full swing. Call to schedule

01/14/2023

Kicking off this season on January 23rd. I’ll be participating in beta testing to begin transmitting returns January 18th. Call or message for your preparation needs.

08/16/2022

✅Home sale exclusion: $500,000 exempted for married taxpayers, and $250,000 exempted for single taxpayers. The property must meet the 2-5 year rule, meaning, the home must have been owned, and used as primary residence for 2 of the past 5 years. This means you can live in the home for a year, rent it out for three years, and move back in for one year. This is referred to as the "residence test."
For example: If you sell your primary residence for $300,000, you would have to report $50,000 in capital gains (if filing single) on your tax return for the year. That's because $300,000 is $50,000 more than the $250,000 exclusion.

✅If you have made money by selling your assets, Uncle Sam would like to take a portion of it. How much you owe uncle Sam depends on how long you have held the asset for. If you have a long term capital gain, meaning you held the asset for over a year, you will owe either 0%, 15% or 20%.
If your filing status is single: your long term capital gains tax is 0% if you earn up to $41,675; 15% if you earn between $41,676 - $459,750; 20% if you earn over $456,750.
(This may change as the current administration has made attempts to tax unrealized gains on the wealthiest Americans. Not a political statement, just stating the facts).

✅With the 1031 exchange, investors can defer taxes by selling one investment property and buying another one of equal or greater value within a specified period of time. For example, say you purchase an investment property for $200,000 and sell it a few years later for $300,000 for a $100,000 profit. If you take this profit and invest it in another property that is equal or greater in value, say $300,001, you will pay no taxes on the gains. Every time you sell an investment property for a profit, you have a choice between paying taxes or using the 1031 exchange.

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.

01/24/2022

E-File is open

01/13/2022

Ohio update:

The opening day for filing your 2021 Ohio individual income tax and/or school district income tax return is Monday, January 24, 2022, which coincides with the date that the IRS will begin accepting 2021 federal income tax returns.

Tax Commissioner Jeff McClain said Ohio taxpayers will find a few new changes that could impact the preparation of the state income tax return. Among those:
Tax rates for all Ohio taxpayers have been reduced: those with taxable nonbusiness income of $25,000 or less will pay no income tax; the tax rate on nonbusiness income of more than $110,650 is now 3.99%, down from the previous top rate of 4.797%, while all other tax rates have been cut by 3.0%.
Old schedules, new names: To better reflect the purpose, Schedule A is now called Ohio Schedule of Adjustments; Schedule J is now called Ohio Schedule of Dependents.
Three new education tax credits are available to eligible taxpayers: for donating to a scholarship granting organization, for home school expenses, and for tuition to a non-chartered, non-public school.
For the fastest processing available, we recommend you submit your return electronically using our free I-File, or file using a commercial software product or tax preparer. As is true every year, paper returns take much longer to process than returns filed electronically. We appreciate that more than 92% of all Ohio individual and school district income tax returns filed last year were filed electronically.

The deadline for filing both your Ohio and federal tax return is April 18, 2022. As a reminder, a request for a filing extension does not extend your payment due date.

If you have additional questions or need assistance with your Ohio return, please visit tax.ohio.gov/emailus or call our taxpayer assistance line at 1-800-282-1780 (1-800-750-0750 for persons who use text telephones (TTYs) or adaptive telephone equipment).

Email Us May 08, 2020 | Agency E-Mail Us Your Tax Questions   The Ohio Department of Taxation will not be issuing advance Child Tax Credit payments to taxpayers. If you have questions about receiving these advance payments from the IRS, please visit www.irs.gov for details.                 ...