Sancus Accounting Services, LLC

01/15/2025

IRS Sending 1 Million Recovery Rebate Payments this January

The IRS recently announced that many people who qualified to claim the Recovery Rebate Credit on their 2021 tax returns neglected to do so. The credit was available to people who did not receive one or more Economic Impact Payments (EIPs, also called stimulus payments) that they were entitled to during the pandemic.

To remedy this situation, the IRS will automatically send approximately one million payments to people who failed to claim the credit. Most of these payments will arrive by the end of January. To deliver the payments, the IRS will either use direct deposit information provided by people on their 2023 tax returns, or mail a paper check to a person’s address on record. If you qualify for a payment but your banking information has changed since you filed your 2023 return, you do not need to take any action. The IRS will simply mail you a check.

Note that the vast majority of people who qualified for EIPs received the full amount due to them, or claimed the Recovery Rebate Credit on their 2021 tax returns. Therefore, only a small minority of people will receive these automatic payments. However, if you may have qualified for the Recovery Rebate Credit but did not file a 2021 return, then you have until April 15 to do so. A tax professional can help you file your return and claim any refund available to you.

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01/15/2025

Get a 2025 IP PIN from the IRS to Protect Yourself from Scammers

The IRS encourages everyone to get an identity protection number (IP PIN) for the 2025 tax filing season. An IP PIN is a unique code that you include on your tax return and any other IRS forms that you file during a year. Using this code prevents scammers from submitting fraudulent tax documents in your name, in an attempt to steal your refund or identity.

The easiest way to obtain an IP PIN is to create an online IRS account (link below). You can also request one by mail by filing IRS Form 15227. The IP PIN registration system is temporarily unavailable as of November 23rd, 2024 due to planned maintenance but is scheduled to be available again January 6th, 2025. Note that an IP PIN only lasts for one calendar year, so even if you had one in 2024, you will need a new one this year. Once you receive your 2025 IP PIN, make sure to include it on your 2024 tax return, so that the IRS will accept it and reject any fakes. A tax professional can help you file your return electronically with your IP PIN properly entered, to ensure the fastest possible processing.

Open an IRS Online Account:

Get an Identity Protection PIN (IP PIN) to protect your tax account.

12/25/2024

08/29/2024

Bogus "Self Employment Tax Credit" Scam Warning

Scammers have been spreading misinformation through ads and social media posts about a supposed Self Employment Tax Credit, which they claim people can use to get massive IRS refunds. In reality, no such credit even exists. The scammers charge fees to prepare tax returns, on which they actually file bogus claims for the specialized Credit for Sick and Family Leave, which was only available for 2020 and 2021.

In reality, only a small number of self-employed people who experienced very specific COVID-related circumstances qualify for the Credit for Sick and Family Leave. IRS personnel flag suspicious credit claims for investigation. In the end, people who get lured in by these scammers have to repay their tax refunds, with penalties and interest charges added. Meanwhile, the scammers disappear with the fees they collect to file false tax returns. Remember, if a tax credit or tax refund claim sounds too good to be true, it usually is.

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12/25/2023

05/02/2023

Tax Refund Myths and Realities

Taxpayers who are owed a 2022 tax refund naturally want to know how quickly that refund will come. Unfortunately, a lot of myths and half-truths about IRS refunds circulate online, giving people false expectations or leading them to waste time on unnecessary steps. Here are four facts you need to know to avoid falling for the rumors.

Calling the IRS or your tax professional will not yield more information about your refund. You can get the most up-to-date information about your refund status nearly around the clock by using the online Where’s My Refund tool or calling the automated hotline at 800-829-1954.

The Where’s My Refund Tool cannot always give a refund date. Many taxpayers believe something is wrong if this tool does not display a mailing or deposit date for their refunds. Although the IRS issues many refunds within 21 days, some returns take longer to process. You will get a refund date once the IRS finishes reviewing your return.

The refund amount displayed by the Where’s My Refund tool could differ from the amount you were expecting. The IRS may need to adjust a taxpayer’s refund amount for a variety of reasons, ranging from math errors on their returns to outstanding financial obligations. When such an adjustment is necessary, the IRS always sends a letter explaining the change.

Getting a 2022 tax refund does not necessarily mean that your 2023 withholding is on track. Regardless of how your 2022 taxes came out, you should check your withholding at least once every year. Tax law changes, along with changes in your marital status, family size or many other factors can affect your withholding. You can use the IRS Withholding Estimator tool to find out if you need to make any adjustments.

IRS Where’s My Refund tool: https://www.irs.gov/refunds

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

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

05/02/2023

Filing Extensions and Minimizing Penalties – Did You Know?

Taxpayers who request an extension to file their 2022 federal income tax returns may file anytime up until October 16th, 2023. Remember, however, that an IRS extension is only an extension to file tax returns, NOT an extension to pay any tax owed. Taxes not paid by the April 18th payment deadline may be subject to late penalties and interest charges.

Electronic payments may be made using the IRS online payment portal. The IRS urges those who cannot pay what they owe at this time to pay whatever amount they can, and then apply for an installment plan to pay off the remaining balance.

If you are required to file, you should still file your taxes, even if you can’t pay, as the failure-to-file penalty may be 10 times more than the failure-to-pay penalty.

IRS Online Payment Portal:

Make payments, view your account or apply for a payment plan with the IRS.

01/12/2023

The has issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. For 2023, the standard mileage rate for business travel will be 65.5 cents per mile. To learn more, see:

IR-2022-234, December 29, 2022 — The Internal Revenue Service today issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

12/01/2022

New Wave of Tax-related Text Scams Warning
The IRS recently issued a warning about a dramatic increase in the number of tax-related texting scams (also called “smishing”) occurring across the U.S. The scammers typically send a text message that appears to be from the IRS, which might include fake instructions to create an online IRS account, threats of tax penalties, or promises of tax or disaster relief. The message then urges recipients to click a link or call a phone number, where criminals stand ready to steal sensitive personal information like Social Security or bank account numbers.

If you receive a suspicious text claiming to be from the IRS, do not respond or click any links. The IRS does not send text messages requesting personal, tax or financial information. You can also help stop the scammers by reporting any smishing messages to [email protected]. Include a copy of the bogus message, the number that it came from, and the date, time and location you received it.

Posted on November 1, 2022