- July 15, 2021
- Posted by: blogtester
- Category: Uncategorized
Recently, the IRS has introduced some Tax Tips that can benefit everyone. Below you can check what the tax tips are about, eligibility criteria, and other information.
Here is #1 of the Tax Tips from IRS. From July 15, the IRS looks forward to enabling every family to use a unique online tool. You can find it only on IRS.gov. It will help them know if they can benefit themselves with the special monthly advance payments and child tax credit.
People who have little or no income, such as homeless individuals, low-income families, and other neglected populations, are considered among them. This tool can assist them in determining whether or not they should proceed to the next step. Further, it will advise them if they can apply for advance child tax credit payments.
The online Non-filer Sign-up Tool assists qualified families who do not file tax returns in registering for the monthly advance child tax credit payments.
The eligible families should not use the Non-filer Sign-up Service. This includes the families that have already filed or plan to file 2019 or 2020 income tax returns. Further, this group also comprises people who have used the Non-filer tool to register for the Economic Impact Payments in 2020.
The CARES Act or the Coronavirus Aid Relief and Economic Security Act permitted employers to postpone depositing and paying the employer’s part of Social Security taxes. They also have allowed the self-employed persons to postpone payment of some self-employment taxes.
People should be aware of the following dates:
- The delay comes in charge from March 27, 2020, through December 31, 2020.
- Employers must pay half of the deferred tax amount by December 31, 2021. The deferred balance tax can be paid by December 31, 2022.
- Penalties and interest shall apply if it does not include submission or payment of any part of the employer’s share of Social Security tax.
Employers should work with their third-party payers to settle deferred taxes before the due dates of December 31, 2021, and December 31, 2022.
To check their withholding, all taxpayers must use the IRS Tax Withholding Estimator. This tool assists users in ensuring that their employers deduct the correct amount of tax from their paychecks. It is available to self-employed individuals, pensioners, employees, and other taxpayers.
Taxpayers can use the estimator by following the following easy steps. The taxpayer will receive the necessary information of whether they need to file a new Form Employee’s Withholding Allowance Certificate (W-4), to any employers depending on the outcomes.
The steps are:
- Assemble your documents:
Taxpayers must have a copy of their most current pay stub and tax return on hand before starting. Taxpayers should visit IRS.gov’s main Tax Withholding Estimator website.
- Respond to the questions:
Users will have to answer some questions concerning their tax position. Click the blue “Next” button to move on to the next section after completing each section.
- Evaluate the results:
Taxpayers can check if they have to fill the new W-4 form using the estimator’s results. They can provide this form to their employer rather than the IRS. Many employers use an automated method to send Form W-4 modifications. Employees should consult with their employer to determine whether this is an option.
Organizations use Form 1023-series applications to apply for tax-exempt status under Section 501(c)(3) of the tax law.
- The IRS.gov application procedure contains a step-by-step tutorial. It walks you through the process of applying for tax-exempt status.
- You can submit the applications for exemption recognition in the Form 1023 series electronically at Pay.gov. The application must get completed and include the user fee.
- Some organizations do not need to file for Section 501(c)(3) status to be tax-exempt. Churches and their integrated auxiliary and public charities with yearly gross receipts of less than $5,000 fall into this category.
- An employer identification number (EIN) refers to a nine-digit number. The Internal Revenue Service uses it to identify a company’s tax accounts. Even if they don’t have any workers, every tax-exempt organization should get an EIN. Every application must have their EIN written on it.
- The approved Form 1023 determines when an organization’s tax-exempt status becomes effective. The effective date of their organization’s exempt status is the legal date of its establishment. However, they should complete this form within 27 months of the month they lawfully founded.
- Unless an organization meets the qualifications to be recognized as a public charity. This will be classed as a private foundation once the IRS finds it qualifies for tax-exempt status under the law.
How can self-employed people and home employers pay back Social Security taxes that have been deferred?
The Coronavirus Aid Relief and Economic Security Act enabled self-employed persons and household employers to delay payment of certain Social Security taxes for the tax year 2020 for the next two years on their Form 1040. The first half of the delayed Social Security tax must get paid by December 31, 2021, and the second half must get paid by December 31, 2022.
Individuals’ options for repaying deferred taxes
Individuals can deposit the postponed amount on or before the deadline at any time.
Things to note:
- Make payments via the checks, money orders, credit or debit cards, or electronic Federal Tax Payment System.
- IRS systems will not recognize the payment for deferred tax if combined with other tax payments or paid with the present Form 1040. So, make it separately from other tax payments. It will guarantee that it is allocated to the deferred tax balance tax year 2020 Form 1040.
- Label the payment as “delayed Social Security tax.”
Individuals who cannot pay the whole deferred tax amount by the installment due dates must pay what they can to avoid penalties and interest charges.
For a partial payment amount, the IRS will send an outstanding balance notification to the taxpayer. To make a payment or request a payment plan, taxpayers must follow the procedures on the notice.
With respect to the IRS, you have a range of tax tips worth noting. Thus, seek help from a knowledgeable firm or a person who can assist you with the entire procedure. So, if you are unsure about your eligibility or have any other concerns, Platinum Tax Defenders can assist you.