Quick Notes!

HELPFUL LOGS: We have several log books available for your use, just ask!

GET YOUR NERF BALLS! We still have some of our 50th Anniversary Nerf balls available for your enjoyment. Pick yours up today!

WALLA-GRAM Our mail-in service makes filing your returns easy & convenient. Ask for yours today!

SECURE LINKS: As an extra measure of security, give our office a call BEFORE e-mailing those confidential tax records and we’ll e-mail you a secure link to use. Super easy and convenient! (Must sign and consent to our Consent to Disclosure of Tax Information first, though).

Lots of Appointment Choices!

The popular Zoom meetings are back! Sue is really enjoying seeing her clients in their own spaces and virtually meeting your new little tax deductions (babies and children) and pets (sadly, pets aren’t actually tax deductions). While we have been setting up Zoom meetings in lieu of in-person meetings, we are happy to also set up Zooms with our faraway WallaGram friends if you’d like, too!

Our meeting choices are: in-person, Zoom, phone or mail/drop-off. Just let us know your preferences and we’ll accommodate you to the best of our ability. As a reminder, if you aren’t feeling well, please don’t come into the office until you are feeling better.

Copies of Tax Returns

Upon completion of your return, everyone receives a paper copy as part of our service. Electronic versions may be ordered and purchased before completion of the returns (CD or Flash with scanned documents), PDF (return only - must approve our Consent for Disclosure), or, a second paper copy. If you want a copy later, a minimum $40 fee per year per copy, per year, regardless of format, may be charged. Plan ahead for upcoming refinancing and home purchases. (Only international clients will receive an electronic .pdf copy in lieu of paper copies.)

SECURE Act 2.0 - New Retirement Rules!

  • The Required Minimum Distributions age changes to 73 starting Jan 1, 2023 (it was 72 in years after 202o) and will be increased to age 75 in 2033.

  • The catch-up amount taxpayers may contribute to their IRAs will be indexed for inflation starting in 2024.

  • Starting in 2024, subject to limitations, unused funds from 529 plans may be rolled over into a Roth IRA.

  • There is now special tax treatment available for a variety of reasons to withdraw funds from your retirement accounts (some don’t start until future years). Retirement funds withdrawn for a disaster or terminal illness are among the special situations sited in these new rules.

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    • Born before July 1, 1949 — RMD starts at age 70 1/2

    • Born July 1, 1949 - December 31, 1950 — RMD starts at age 72

    • Born 1951 - 1959 — RMD starts at age 73

    • Born 1960 or later — RMD starts at age 75

Foreign Bank and Financial Accounts (FBAR)

As a reminder for taxpayers who have foreign bank accounts or signing authorization on foreign accounts, FBARs must now be electronically filed with the Treasury Department on FinCEN Form 114. Visit fincen.gov to file yours today; regretfully, we are no longer able to file these forms for you.  The due date for these forms is April 15, 2024.  An automatic 6-month extension to October 16 is granted to all taxpayers if you file your FBAR by April 15.

Don't Forget to Provide Stock Basis!

Not all purchase information for assets sold is provided on the your 1099-B forms because the brokerage firms were only required to keep track for assets purchased starting in 2011. It is your responsibility to provide the purchase price and original cost of stocks, real estate and any other assets you sold by searching your records or asking your broker. A fee will be charged if you want us to compute the basis for you. THE IRS WILL ALWAYS ASSUME THAT THE BASIS IS ZERO IF YOU CANNOT PROVE OTHERWISE.  Therefore, if you don't provide the basis we will take the IRS stand on this and also use zero which may result in a higher tax.

A Little Reminder about Electronic Files…

We love technology as much as anyone, however please remember when sharing your electronic documents that we require your scanned files to be in pdf format and your Word and Excel documents must be compatible with Microsoft windows. We will not download additional software to read your data. NO CELLPHONE PICTURES PLEASE!

We prefer that your e-mailed documents are sent via secure link to protect your privacy.  Contact our office to find out how.  Always secure is FAX (215) 540-0970, US Mail, or you can just drop it off in person. 

What to Bring...

Please bring ALL records of income to your tax appointment EVEN IF YOU THINK IT'S NOT TAXABLE! The IRS is doing a more thorough job of matching Schedule D (stock transactions) and 1099 (dividends & interest) than ever before; sometimes with surprising results for taxpayers. We will help you to determine if the items need to be reported or not. 

Also, please remember to fill out our questionnaires and signature forms every year because they are painstakingly updated yearly to ensure that you are getting all the deductions that you deserve.

Coming for Tax Year 2022…er..2023...2024…Attn: Anyone Receiving Third-Party Payments

Just a reminder, it has always been true that you must report all worldwide income on your tax returns. The tax reporting form 1099-K has been around since 2008 which requires all credit card companies and third-party processors like Amazon and PayPal to report sales to the IRS. This was issued to anyone who’s sales volume was over $20,000 and more than 200 transactions.

Flash forward to the American Rescue Plan passed in 2021 where Congress has made a small but impactful change to the reporting requirements for 1099-K. A 1099-K will now be issued to anyone who’s third party sales are over $600, regardless of how many transactions were made. This is going to include those who use any third party payment processors from Visa to Venmo. Again, all money that you receive from your customers is income subject to tax, regardless of whether it is reported on a 1099 or not.

The IRS has been phasing this requirement in over the next few years. While the IRS changed the reporting requirements for tax years 2022 and 2023, taxpayers should be aware that they could still receive 1099-K forms for these tax years.

NEW: Just before the 2023 filing season began, the IRS suspended this requirement again until next year. Therefore, you may or may not receive a 1099-K for 2023 but you will for 2024. If you did receive a 1099-K for 2023, we may need to deal with it on the tax return, so include it with your paperwork!

Virtual "Crypto" Currency Craze

As a reminder, all worldwide income is taxable in the US, including income from virtual currency.

Virtual currency is a digital representation of value. Issued by private parties, such as a group of developers or organizations, digital currency is intended only for online use only because they do not have a physical incarnation like paper money. Examples of virtual currency are Bitcoin, Ethereum and Litecoin. Many cryptocurrencies are widely available on online cryptocurrency exchanges, such as Coinbase or Gemini.

Everyone must answer the question on the front of the 1040 return whether they received, sold, exchanged or disposed of virtual currency during the year. Transactions include: receipt or transfer of virtual currency for free; exchange of virtual currency for goods or services; a sale of virtual currency; an exchange of virtual currency for other property (including another virtual currency); a disposition of financial interest in virtual currency.

There are some places where virtual currency operates as “real” currency, but in the US, it does not have legal tender status. Cryptocurrency exchanges do not issue tax forms. Therefore, taxpayers should obtain their transaction history reports for cryptocurrency investment accounts held in cryptocurrency exchanges to determine if there are taxable transactions to report. In the US, virtual currency is treated as property, like gold or stocks. In 2023, the US will start to require more reporting for virtual currency. As virtual currency continues to become more popular, expect US tax laws that apply to it to be subject to change and/or reinterpretation.

Identity Check (ATTN: New York workers/residents)

… and some other folks, too: the IRS is collecting driver’s license data to verify identity and many states are requiring driver’s licenses to e-file state returns. This is mandatory in: Alabama, New Mexico, New York, Ohio and Vermont and Ohio.  This is optional in New Jersey and Pennsylvania.  Be sure to provide these details on our questionnaire if you wish to add this extra layer of security to your e-filed tax returns.
 

E-Mail Authorization & Consent to Disclose

Because of conflicting rules between FINRA and the IRS, clients MUST sign a consent to Disclose Tax Return Information in order to send e-mails to sue@wallatax.com. Sue must remove you from her e-mail contact list if you do not sign this form. You can still send documents to other office e-mail addresses and by fax, drop-off and mail, see us personally or speak to us by phone. For those who wish to meet with Sue via Zoom, you will need to consent to this disclosure in order for her to invite you via e-mail.

Business Deductions

The IRS will not allow deductions for computers, cars, and other items for which records and logs are incomplete. The IRS is required to disallow these expenses without proper substantiation. We have various logs available upon request for your use. 

The 2018 Tax Cut Act will no longer allow business deductions for employees of companies.  If you are being reimbursed by your employer for business expenses incurred, you should ask them to offer you an accountable plan and have them reimburse you directly.  Some of these business expenses are deductible in certain states, including Pennsylvania, so you should still keep track of your union dues, required uniforms, safety equipment and other items that are not reimbursed from your employer because they may be deductible by your state.. 

Reviewing Self-Prepared Tax Returns

As a matter of policy, we do not review or offer opinions on self-prepared tax returns. We do not use Turbo Tax or other off-the-shelf software, and, therefore, would have to recreate your work by hand. Instead, you should provide us with the actual tax documents, logs, spreadsheets and/or figures that you used to generate your sample returns instead of the worksheets and tax forms that you created on your own software.

Year-round Help Available

We are available all year to answer your tax questions. However, we may charge for inquiries requiring 15 minutes or more, or involving computations. Fees will be based primarily on the time devoted to the assignment, including conferences, phone calls, factual investigations and analysis, research, document preparation and other services rendered on your behalf. Sue's hourly rate is $240, subject to change. 

Where is My 1095 Form?

The health insurance mandate penalty was reduced to zero with the 2018 Tax Act and you no longer have to prove that you had health insurance for the year on your federal tax return. However, if you received the premium credit issued through the marketplace or exchange, you are required to file a tax return. The premium credit is reconciled on your tax return to determine if you indeed are eligible to receive the credit. The credit is based on your income and some complicated calculations to determine how much credit, if any, you may be entitled to.

If you were covered by health insurance at any time last year, you will receive at least one of the following forms:

1095-A - issued to people who purchased insurance through the government exchange.

1095-B - issued to people covered by Medicare or who purchased a policy directly from an insurance company, rather than through an exchange.

1095-C - issued to people who were covered by a plan through their employers.

If you or any of your dependents received health care coverage through the marketplace at any time last year, please remember to include your 1095-A with your tax documents because you may need to file a tax return.

These 1095 forms are required to be sent to consumers by January 31. 

Some states, like Massachusetts, do require health insurance coverage so you may need to include certain information with your tax documents in order to complete your state returns as well.