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Happy Womens' History Month


 

Listen to the podcast here
Watch the YouTube video here tomorrow

 

TaxMama’s® TaxQuips  
Ask First Act Later   



It's TaxQuips time from TaxMama.com® .  
Today TaxMama® wants to suggest that you get advice FIRST before making major financial moves.



    

Dear Family,

Let’s start with the big thing this weekend – changing the clocks to Daylight Savings Time. Remember the old adage “Fall back; spring forward.” So that means we set the clocks forward one hour in order to get more daylight at the end of the day. A few US states and territories don’t participate – just to confuse and confound the rest of us -  I think.

Good news (sort of) from the IRS. They are opening their Taxpayer Assistance Centers (TAC) to walk-ins tomorrow, Saturday March 11th. This includes TACs all over the country. The instructions are in this IRS announcement. Go very early to secure your place in line. Wrap yourself in something warm and bring a thermos with your favorite hot beverage.

Deadline – Tax returns for partnerships and S corporations are due on March 15th.  Use Form 7004 to file the extensions. https://www.irs.gov/forms-pubs/about-form-7004  Folks in the counties with disaster areas in California, Alabama and Georgia are not required to file extensions. You have until October 16th to file the returns (and to pay certain taxes without penalty). Note: Georgia is still showing May 18th as their deadline.

The Heart of the Matter – Ask First; Act Later

This month, I have had several TaxMama® Forum questions from people wanting to minimize their taxes – after they took some significant financial actions.

  • Taxpayer owned a house for decades. His daughter and her husband were living with him – but did not qualify him for head of household. In 2022, he sells the house at a gain well in excess of the $250,000 personal residence exclusion He’s facing a big tax bill.       

o   How could he have eliminated that tax bill?

  •  Put daughter and/or her husband on title.Using their own $250,000 personal residence exclusion, he could have eliminated all the capital gains taxes.
  • Yes, there may be some other gift tax and profit-sharing issues. That’s what tax planning is for.
  •  Taxpayer just got their W-2 and noticed that the withholding is for the wrong state. They moved to another state. They never really looked at their paystubs all this time – and now owe a fortune to their current state.

o   How could he have eliminated that tax bill?

  • Anyone making any change in job location or family size, or other life changes must review their paystubs to ensure the withholding is the correct amount – and for the correct state. Verify with the payroll department!
  • In this case, the taxpayer will file a part-year resident return with the state that has all the withholding and wait to get that money back.
  • Then, they will have to file a part-year resident return with their current state – and they will owe 100% of that state’s tax balance, along with penalties and interest for paying late.

Actually, there were several other times in which I had to say, you’re breaking my heart. I wish you had asked first. I just can’t remember them al.

But the message is the same. Please, Please, before spending a lot of money – on just about anything unusual, before withdrawing money from IRAs or retirement accounts, before making gifts, transferring title, or starting businesses, please, please, invest the time and money to meet with a tax professional who is experienced in the area of expertise that you need. It costs so much more to fix problems, than to avoid them in the first place.

And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion


To make comments, please drop into the TaxQuips Forum.



 It’s time for Everything!

 

People are still asking so many questions about the 2023-2024 EA exam. So we will hold our first annual (complimentary) webinar – please clear some time on your calendar if you are interested in taking the IRS Exams this year.

If you are not currently a tax preparer but think this might be a worthwhile career to explore – DO come and join us. You would be so welcome, too.

Everything You Wanted to Know About the EA Exam,
but didn’t know who to ask:

Date: Tuesday March 21, 2023
Time: 4:00 pm Pacific
For more information and no-charge sign-up:
https://iTaxMama.com/KickStart-TM

Incidentally, we are bribing you to join us. Anyone who stays for the entire presentation will get a $100 coupon off the price of the Premium class.

(If you have already signed up for the Premium class in 2023 – AND you sit through the entire presentation – we will send you a $100 refund.)

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And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion

To make comments, please drop into the TaxQuips Forum.

Hugs,

Eva
Copyright © 2023 IRS Exams, All rights reserved.


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