Karlson Tax and Accounting

09/29/2024

Lazy Sunday afternoon. ZZZZZZ💤

06/25/2024

After an "Upgrade" a couple of weeks ago my business email stopped working. Many telephone calls to my Website host, the software provider and Microsoft I came to the conclusion that I had to pick a new email service provider and change my business email address. So, now the Business email is [email protected]. All accounting and tax emails will start using the new email address immediately.

Anyone who has sent emails over the past two weeks and has not heard back, I apologize and please re-send to [email protected]. It appears that I will not be able to recover any emails sent after June 7th to the old business email address.

Thank you for your understanding. (Thus my earlier comment about going to Morse Code).

07/31/2023

We are seeking a motivated, self-starter with entrepreneurial aspirations to take on the accounting and tax preparation responsibilities for an existing small firm with a robust and growing client base.The ideal candidate will be an upper-classman with an accounting/income tax focus who would...

09/27/2021

As the fourth quarter of 2021 approaches we begin to prepare ourselves for the annual ritual of filing our tax returns!

Okay, maybe YOU aren’t thinking about it, but I am. The past two tax filing seasons have presented challenges due to all of the changes made in the tax code, Unemployment Compensation being taxable until it wasn’t, unless you made too much. Unemployment Income causing the Advanced Payment for ACA insurance to trigger a re-payment until at the end of March the congress decided, OOOPS! We didn’t mean for that to happen, IRS will correct the tax refund accordingly. Reconciling two stimulus payments which weren’t taxable but were limited if you made too much based on your 2019 income, but if your income was reduced in 2020 over 2019 you could claim the stimulus that you didn’t get based on your 2019 adjusted gross income as a credit on your 2020 tax return. (Got all that)?

Well, there is a third stimulus payment in 2021 which will have to be reconciled on your 2021 tax return. In addition, taxpayers with dependent children have started getting the Advance Child Tax Credit as a monthly payment based on the 2020 tax return. Those payments will also have to be reconciled so that the correct figures can be calculated on the tax return. And it remains to be seen what the 535 congress critters will do to the tax code in the next quarter or even beyond, in arrears…
If the proper figures are not reported on the tax return the IRS will use the amounts that they have and send the taxpayer(s) a letter explaining that the amounts reported on the tax return don’t match their figures and adjusting the refund accordingly. Then the taxpayer(s) call me and ask what the???
Since the Advance Child Tax Credit depends on the age of the child and dependent status, and some families alternate dependency due to divorce, I predict that 2021 will be even more challenging based on the possibility that the IRS will be sending the advanced payments to the wrong parent based on the 2020 tax return. This may cause a refund to turn into a tax due situation. I do not know if the IRS is able to consider those with alternating years for dependents. (If you are in this situation and you haven’t filed form 8332 – Release of Child Exemption, you may want to consider doing so).
So, I have a suggestion for everyone out there, but especially for those with dependent children. The IRS has created a personal portal where you can view your tax history including the amounts for each of the stimulus payments, child tax credit as well as to review your tax history. You can register for your own personal account at irs.gov and be able to see all of the pertinent information. They ask some personal questions based on the last tax return you filed to verify your identity and you create your own user name and password. You will also see if there are any surprises out there and also be able to see the status of your current tax return once the IRS has received it.
We will be asking for the dollar amounts received for the third stimulus payment as well as the Advance Child Tax Credit amounts received, accurate figures will make filing an accurate tax return much easier and prevent the dreaded letter from the IRS.
If you have any questions, please feel free to contact us.

06/30/2021

https://www.fox6now.com/news/massive-backlog-at-irs-delaying-tax-refunds

Every day I get telephone calls from clients who haven't received their refunds wondering if I forgot to file the tax return or if the IRS lost it. I get confirmation that a tax return was received by the IRS electronically within a couple of days. If you log onto the "Where's My Refund" feature on irs.gov they will specifically tell you if they have NOT received the tax return. If they have received it they may say that they are still processing it or indicate when the refund will be, or has been, sent.

Unfortunately, I do not have any back-door or special access to the IRS, I have the same telephone numbers that you do and they give me no special consideration as the tax preparer to discuss a client's tax return unless the client gives me power of attorney.

The article below attempts to explain the situation. Personally, I find it appalling that the IRS can't answer the phone or process the tax returns in a timely fashion regardless of the circumstances. If I was an essential service as a tax preparer who was not shut down during the pandemic, shouldn't the IRS have been as well?

I have recommended that taxpayers who are experiencing delays in getting refunds contact Taxpayer Advocate Services as well, but I understand that they can not or will not look into these issues.

Perhaps it is time to contact our Senators and Congressmen and demand that the IRS and the tax code be immediately reformed.

Waiting on a tax refund? You’re in good company. It’s taking the IRS weeks, even months longer than usual to process tax returns.

03/26/2021

The good news is that the worksheet for reporting the first $10,200 of unemployment compensation as non-taxable is now available on my tax software. So, this weekend I will be finishing all of those tax returns that I have put aside waiting for guidance from the IRS.

The Bad News is that Wisconsin does not recognize the federal law and all of the unemployment compensation received is considered taxable and must be added back to Federal AGI to calculate Wisconsin Income. As always, some of the UC may not be taxable in WI when Wisconsin Income is considered, there is a worksheet for that.

The IRS has recommended that those who have filed their tax returns prior to the change in the law DO NOT file amended tax returns. They have not offered guidance on how they intend to deal with that, but perhaps they will re-calculate the tax return and send another refund based on the change in income. Stay tuned...
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03/17/2021

The latest "Stimulus" bill has made the first $10,200 in Unemployment Compensation benefits received in 2020 tax free. The IRS has issued the following guidance to those who have already filed tax returns: Do not file an amended tax return, they are working on a worksheet with the various providers of tax software to address the issue.

Those of you who have already filed your tax returns, please sit tight and we will address the issue as soon as a solution is available. Those of you who we are currently processing will be held back until the issue is addressed.

We thank you for your patience and understanding during this tax season.

01/07/2021

The CARES act made it possible for taxpayers who do not itemize deductions to take up to a $300 adjustment to total income for charitable contributions. Please remember to provide your charitable contribution figures to your tax preparation service so that you can get this deduction this year.

If you have any questions, please call! ☎️

11/23/2020

The 2020 Tax Software is here! I can't remember ever being so happy! For those of you who may not have received the stimulus payment, or perhaps didn't get what you were expecting, you can report what you did get (or not get) on your tax return for 2020 and receive the difference. If you have any friends or family who should have gotten the stimulus check and didn't because they don't normally file a tax return, they should consider doing so for 2020.

05/27/2020

You have got to be kidding me!!! Really IRS?

According to the IRS, if you receive your stimulus check as a prepaid debit card, it will arrive in a plain envelope from “Money Network Cardholder Services.”

05/11/2020

Beware! Especially with the "enhanced" benefits that are being paid...

Here's how to avoid getting a huge tax bill.