David Mitchell Snyder, CPA

Own rental properties? Here is some information to help you ensure that your rental losses are taken into account on your tax return, and red flags in the eyes of the IRS to keep in mind.

Real Estate Tax News - David Mitchell Snyder, CPA, LLC The passive loss rules prevent deducting rental real estate losses with two exceptions. Exceptions: 1. The Real Estate Professional Exception. Taxpayers who spend more than 50% of their working hours and over 750 hours each year materially participating in real estate as a developer, broker, landlor...

We here at David Mitchell Snyder, CPA wanted to let you know that, as of today, February 1st, 2023, we are six (6) weeks out from the Business filing deadline, Wednesday, March 15th, 2023. We know you are working hard on getting your documents in so we can file you on time. If you are looking to be Extended, we will be happy to do that. However, we are now charging $25 to file the Extension, so please be aware of this when you make your decision.

If you need assistance with uploading your documents to us, or if you have any questions, please feel free to contact us at 727-310-8106 or at [email protected].

Tangible Personal Property Tax Returns - a primer

All new and previously taxed businesses are required to timely file a Tangible Person Property Tax Return (Form DR-405). The exemption does not apply in any year that a taxpayer fails to timely file a return that is not waived.

Businesses that filed and benefited from the Tangible Personal Property Exemption have been mailed exemption renewal postcards. As long as the value of your property remains at $25,000 or less on January 1 of each year and you receive a postcard, you will not need to file a TPP Return. If the value of your property was more than $25,000 on January 1 of last year or any following year, you must timely file a TPP Return (DR-405).

We have successfully sent out all Tax Organizers to all our clients. While you do not have to use the Organizers, they come with questions and information we will need answered in order to file your Tax Return. For returning clients, you should have reference number added to your Organizers to help you see what documents you filed last year and how much. Lastly, when you fill out an Organizer for us, it allows us to get your information into our system faster, and that means your invoice for our work will also be lower.

If you have not received a Tax Organizer, or you would like one, please feel free to contact us at [email protected] or at 727-310-8106 and request an Organizer today!

The Internal Revenue Service issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.
14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.
These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

The Tax Season start dates have finally been announced! The IRS will start accepting Corporate Tax Returns starting today, January 12th, 2023. For Individuals, the IRS will start accepting those Tax Returns starting Monday, January 23rd, 2023

We’re already in the swing of the tax season, so if you would like to schedule an appointment, please contact us at 727-310-8106 or email us at [email protected].

Now that 2023 Tax Season is nearly ready to go, we’re setting up to help you get your taxes done! We’re prepared Tax Organizers for our clients. How will the Organizer help me? Well, it has reference numbers from your last tax return added on, so you can see what papers you might be missing as well as where your income or expenses might change. Also, filling out your Organizer helps us know where the information goes, allowing us to work faster and make sure your tax return invoice is cheaper.

We will be sending the Tax Organizers through our encrypted portal. You should receive an email inviting you to log in and download it. If you are a client and haven’t received one, or would like one, please contact us at 727-310-8106 or email us at [email protected] for your free Organizer today.

Many taxpayers make quarterly estimated tax payments during the year to stay current on their taxes, but many who should overlook this step. The Internal Revenue Service today urged those who paid too little tax in 2022 to make a fourth quarter payment on or before January 17 to avoid an unexpected potential tax bill or penalty when they file in 2023.

Taxes are normally paid throughout the year by withholding tax from paychecks or by making quarterly estimated tax payments to the IRS or by a combination of both. Individuals do this because income taxes are pay-as-you-go, meaning taxpayers need to pay most of their tax during the year as income is earned or received.

If you need us to prepare an estimated payment for you, please call us at 727-310-8106 or email us at [email protected].

David Mitchell Snyder, CPA wishes you all a safe and glorious Happy New Year! May your 2023 be prosperous!

EMPLOYEE RETENTION CREDIT

The IRS giveth, the IRS taketh away

Few taxpayers understand that if they received an Employee Retention Credit, they must reduce their wage related expenses by the amount of the credit. To make matters worse, the IRS has decreed that taxpayers must reduce their wage expenses in the year the wages were incurred that generated the Employee Retention Credit not in the year the credit was received. Since the IRS has taken so long to refund these credit amounts, the wages usually must be reduced in a year before the credit or refund was issued. For example, (for even cash basis taxpayers), many taxpayers must reduce their wage related expenses in 2021 for refunds or credits they received in 2022.
The horrific result is that many business taxpayers must amend their 2021 tax returns. Individuals that are shareholders of S-Corporations that received the ERC may also have to amend their 2021 tax returns. At a time when the IRS is already extraordinarily slow in processing returns, they will now get an influx of amended returns to process. In addition, interest and penalties may be assessed against these taxpayers. Too bad Congress is more interested in conducting political investigations that have no legal bearing rather than helping their constituents out of this ridiculous dilemma that they created.

David Mitchell Snyder, CPA wishes you and yours a Merry Christmas! We hope your day is filled with food, family, and fun!

We hope everyone is having a safe and wonderful holiday season! David Mitchell Snyder, CPA will be closed for Christmas on Monday, December 26th, 2022, and we will be closed for New Years on Monday, January 2nd, 2023. If you have a question or request, you can leave us a message at 727-310-8106 or at [email protected], and we will get back to you as soon as possible.

Happy Holidays!

David Mitchell Snyder, CPA wishes you and yours a joyous Happy Hanukkah!

Make Use of the 0 Percent Tax Bracket

In the old days, you used this strategy with your college student. Today, this strategy does not work with that student because the kiddie tax now applies to students up to age 24.

But this strategy is a good one, so ask yourself this question: do I give money to my parents or other loved ones to make their lives more comfortable?

If the answer is yes, is your loved one in the 0 percent capital gains tax bracket? The 0 percent capital gains tax bracket applies to a single person with less than $41,675 in taxable income and to a married couple with less than $83,350 in taxable income.

If the parent or other loved one is in the 0 percent capital gains tax bracket, you can add to your bank account by giving this person appreciated stock rather than cash.

Example. You give Aunt Millie shares of stock with a fair market value of $20,000, for which you paid $2,000. Aunt Millie sells the stock and pays zero capital gains taxes. She now has $20,000 in after-tax cash, which should take care of things for a while.

Had you sold the stock, you would have paid taxes of $4,284 in your tax bracket (23.8 percent x $18,000 gain).

Of course, $4,000 of the $20,000 you gifted goes against your $12.06 million estate tax exemption if you are single. But if you’re married and made the gift together, you each have a $16,000 gift-tax exclusion, for a total of $32,000, and you have no gift-tax concerns other than the requirement to file a gift-tax return that shows you split the gift.

You need to get an Identity Protection PIN (IP PIN)
Tax Return Filing Fraud is on the Rise!

An Identity Protection PIN is a six-digit number that adds a layer of security to your income tax filing. Taxpayers may request an IP PIN before they are victims of identity theft. We recommend doing this as a proactive way to protect yourself from identity theft.

Go online to your IRS.gov account (or set one up). Use the online Get an IP PIN tool.
You will immediately get your IP PIN online.

If you are unable to verify your identity online, you can call to make an appointment for an in-person meeting at a Taxpayer Assistance Center. Bring two identification documents, one must have your picture on it. The nearest Taxpayer Assistance Center is located at 9450 Koger Blvd N, St. Petersburg, FL 33702. There telephone number is (844) 545-5640.

E-file Shutdown

Bad news for you late e-filers. The IRS has shut down their e-filing system for maintenance ahead of the 2022 Tax Season. While there is no official word on when they will reopen, all accounts we have read indicate that the shutdown will last until the beginning of the 2022 Tax Season, which is currently slated for Late January 2022.

If you still need to file, you are not out of luck. Paper filing is still an accepted way of getting those Tax documents filed. Do keep in mind that the IRS is still taking at least ninety days to process paper filed documents. If you need assistance with preparing your Tax documents, please contact us at [email protected].

HEAR YE HEAR YE!

Our December Tax Planning Newsletter has been released! It contains information you should know about the upcoming year, including changes to the Tax code, how to purchase a vehicle for your business, and investing advice. If you are interested in reading up on these topics, please feel free to contact us and request a copy. When you contact us, please let us know if you want the Business or the Individual Newsletter.

We wish you all a wonderful and safe Thanksgiving week! David Mitchell Snyder, CPA will be closed from Wednesday, November 23rd, 2022 to Friday, November 25th, 2022. We will reopen on Monday, November 28th, 2022.

The IRS is making significant progress to get ready for the 2023 Tax Season. They announced on October 27th, 2022 they have hired at least 4,000 new customer service representatives to answer phones and provide services. Thanks to the Inflation Reduction Act, the IRS has more funding to hire and train new people to assist taxpayers with their issues. Since 2020, the IRS has been struggling to answer phones. The IRS is looking to add another 1,000 customer service representatives by the end of the year, bringing the total of new hires in this area to 5,000. The majority of them should be in place for the start of the 2023 tax season, and others will join as their training is completed. For more information, read here: https://www.irs.gov/newsroom/irs-quickly-moves-forward-with-taxpayer-service-improvements-4000-hired-to-provide-more-help-to-people-during-2023-tax-season-on-phones

WHEW!

We hope everybody is doing well! Between Hurricanes and the Tax Season deadline, we've been quite busy. Tax season is over for 2022, unless you live in Florida. Due to Hurricane Ian, all residents of Florida received a further extension on their deadline. Florida residents now have until February 15th, 2023 to file their Tax Returns.

If you still need to file a 2021 Federal Tax Return, contact us at 727-310-8106 or at [email protected] to set up an appointment to get your documents in.

Attention!

Due to Hurricane Ian, David Mitchell Snyder, CPA will be CLOSED from September 27th, 2022 to Thursday, September 29th, 2022. We expect to reopen on Monday, October 3rd, 2022, but please understand that this will be contingent on how the hurricane treats us. Please stay safe, everyone!

Good day everybody!

We hope your year has been great! As we move closer to the end of September, we wanted to remind you of the upcoming IRS deadline. If you had us file an Extension for your 2021 Federal Individual Tax Return, that April 15th deadline has been extended to Monday, October 17th, 2022. Since that is less than 29 days away, time is running out on being able to file before the deadline.

For us to timely file your Individual Tax Return, we will need your information as soon as possible. If we receive your information before September 30th, 2022, we pledge to make sure your Tax Return will be filed by the deadline. Otherwise, we cannot make any promises. If you have questions, please feel free to reach out to us at [email protected] or call us at 727-310-8106.

We've Moved!

David Mitchell Snyder, CPA has a new home! Starting on September 6th, 2022, we are now located at 1874 Gulf to Bay Blvd, Clearwater, FL 33765. You can find us between the Mister Car Wash and the McDonalds. We will be updating our information as soon as possible, so that finding us will be easier than ever!. You can always contact us via phone at 727-310-8106 and online at [email protected].

Big changes!

As of 07/31/2022, the Tax Axe will no longer be located at 5247 Park Street North. They are moving to Clearwater to join forces with David Mitchell Snyder, CPA.

Going forward, David Mitchell Snyder, CPA will be offering tax preparation and tax planning services as normal. The Tax Axe will continue to offer bookkeeping, sales tax, and payroll services, but now under the name of David Mitchell Snyder, CPA.

We look forward to our brighter future together! Please contact us at 727-310-8106 or at [email protected] for questions or scheduling.

The Inflation Reduction Act

The Inflation Reduction Act of 2022 was signed into law on Aug. 16, 2022. The legislation includes large investments in making health care and prescription drugs more affordable, fighting climate change and taxing wealthy corporations.

Despite its name, estimates show that the bill won’t do much to reduce inflation. A projection from Penn Wharton estimates that the Act would slightly increase inflation through 2024. According to the Congressional Budget Office (CBO) the bill will not materially change the inflation rate, if at all. On the plus side, the CBO does estimate that the bill will decrease the deficit by more than $100 billion over the next decade.

Even if it is inappropriately named, the Act remains a significant piece of legislation.

Here are the major provisions:
• Creation of a 15% corporate minimum tax rate: Corporations with at least $1 billion in income will have a new tax rate of at least 15%. Taxes on individuals and households won’t be increased. Stock buybacks by corporations will face a 1% excise tax.
• Prescription drug price reform: The Act will allow Medicare to negotiate the price of certain prescription drugs, hopefully bringing down the price recipients will pay for their medications.
• IRS tax enforcement: The bill invests $80 billion in the nation’s tax agency over the next 10 years.
• Affordable Care Act (ACA) subsidy extension: The ACA subsidies, which were scheduled to expire at the end of this year, will be extended through 2025.
• Energy security and climate change investments: The bill includes numerous investments in climate protection, including tax credits for households to offset energy costs, investments in clean energy production and tax credits aimed at reducing carbon emissions.

For more information on The Inflation Reduction Act see https://www.forbes.com/advisor/personal-finance/inflation-reduction-act/

September deadline – Final call

The September 15th, 2022 filing deadline is right around the corner if you have an S-corporation, Partnership, or Estate Tax Return under Extension! September 1st is only seven days away. If you can get all your information to us as soon as possible, we will do the best we can to file your Tax Return, then amend it later this year.

You can upload your documents to our encrypted portal, send it to us via Google Drive, or bring them by our office at 1426 Gulf to Bay Blvd. If you need assistance or have questions, please feel free to reach out to us at [email protected] or call us at 727-310-8106.

Tax Relief for individuals and businesses who have late filed 2019 & 2020 Tax Returns

To assist people struggling with the current inflation, the IRS is implementing a program to refund 1.6 million taxpayers for penalties and interest charged during the 2019 and 2020 Tax Year. Framed as COVID-19 relief, the IRS is taking steps to refund those who have paid the penalties and waive the fees for those who have not yet filed. The outstanding Tax Returns must be filed by September 30th, 2022 to qualify. The relief applies to the failure to file penalty. The penalty is typically assessed at a rate of 5% per month and up to 25% of the unpaid tax when a federal income tax return is filed late. Penalty relief is automatic. This means that eligible taxpayers need not apply for it. If already assessed, penalties will be abated. If already paid, the taxpayer will receive a credit or refund.

If you have any questions about how this will affect you, please contact us at 727-310-8106 or at [email protected].

A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or independent contractors.

Here's some information to help business owners avoid problems that can result from misclassifying workers.

An employee is generally considered anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public.

Independent contractor vs. employee

Whether a worker is an independent contractor, or an employee depends on the relationship between the worker and the business. Generally, there are three categories to consider.

Behavioral control − Does the company control or have the right to control what the worker does and how the worker does the job?

Financial control − Does the business direct or control the financial and business aspects of the worker's job. Are the business aspects of the worker's job controlled by the payer? Things like how the worker is paid, are expenses reimbursed, who provides tools/supplies, etc.

Relationship of the parties − Are there written contracts or employee type benefits such as pension plan, insurance, vacation pay? Will the relationship continue and is the work performed a key aspect of the business?