Tax Office of Sharyn Scarrott, EA

Readers Choice 2023..thank you to the voters..and 3rd runner up in Best Accountant/Tax Preparer

Please don't get upset at your tax pro for the backlog at the IRS. On February 3rd, IRS Commissioner Charles Rettig announced that he is going to reassign 1,200 IRS employees to work on the backlog of 10.5 million unprocessed tax returns and 5 million pieces of taxpayer correspondence (as of the end of December). https://www.marketwatch.com/story/this-is-an-all-hands-on-deck-situation-irs-assembles-surge-team-of-1-200-staffers-to-tackle-filing-backlog-and-busy-tax-season-11643907833

According to the Taxpayer Advocate’s 2021 Annual Report to Congress, the backlog is the number one most serious problem facing the IRS. To reassign only 1,200 employees out of 82,000 total is probably not going to affect the problem.

If you figure each chore of responding to mail, or processing a return takes 1 hour, the task will be handled in 15,500,000 hours, or 12,917 hours per each of the 1,200 persons reassigned. Given 2,080 working hours in a year, that’s about 6 years to get the backlog handled; and that is without time off and actually working 8 hours per day.

We are working as hard as we can, but some things are out of our control. Even the Taxpayer Advocate Service is completely overwhelmed

'We need this help': IRS assembles 'surge team' of 1,200 staffers to tackle filing backlog and busy tax season 'This is an all-hands-on-deck situation,' said IRS Commissioner Charles Rettig.

Here is what the 6419 looks like - don’t forget you will need these to accurately prepare your tax return!

The IRS has issued News Release IR-2021-255 to announce that from now through January, it will be issuing two letters to taxpayers:

1. Letter 6419 will report the amount of advance Child Tax Credit payments issued to the taxpayer during 2021 and the number of qualifying children used to calculate the credits

2. Letter 6475 will report the third round of Economic Impact Payments issued to the taxpayer during 2021, including the advance “plus-up” EIPs.

Please keep both of these notices, as they will be needed to complete your tax return

Today is the last day to opt out of July's advance child tax credit.

"Eligible families will receive half of their credit in the form of monthly payments of up to $250 per school-age child and up to $300 per child under 6 from July through December 2021. The other half will be paid out when they file their 2021 taxes. The credit is income-based and starts to phase out for individuals earning more than $75,000 a year or $150,000 for those married filing jointly."

Keep in mind that the child tax credit often offsets taxes owed, so if you do not opt out, you might get less of a refund than what you are used to. You could also possibly owe if your income is high enough that the child tax credit is phased out

https://www.cnbc.com/2021/06/28/last-day-to-unenroll-in-july-advanced-child-tax-credit-payment.html

This is the last day to opt out of the first advanced child tax credit payment For parents looking to opt out of receiving the advanced child tax credit payments that are set to start July 15, the last day to do so is June 28, 2021.

The House just passed the American Rescue Plan Act of 2021 and President Biden will sign it into law in the next few days. There are two 2020 tax law changes retroactive to returns being prepared now and a ton of changes to tax year 2021 that put cash in your pocket.
There is also another economic impact payment (stimulus check) coming. You do not need to file your 2020 tax return right now to claim your check. The law allows for an additional payment in a few months if your 2020 tax return shows you are entitled to more versus your 2019 tax return.
Your tax professional needs some time and space to learn about these changes, analyze their impact, and develop personalized recommendations to maximize your COVID-19 tax benefits.
If you self-prepare your tax return, this may be the year to get professional advice. Look for a credentialed tax professional (EA, CPA) who has taken education on this new law and other COVID-19 tax benefits to assist you.

Credit to Tom Gorczynski

You heard the House passed a bill, and you heard the Senate passed a bill. But it's not the same bill. It's not a final tax bill! Take a look at this pic that illustrates the legislative process including what happens when the House and the Senate have different tax bills.

No matter what happens or what passes, the Tax Office of Sharyn Scarrott, EA will be able to help you with all your tax matters.

Thank you Luis V Plascencia, CPA for the visual diagram.

Here's the banner that flew over the Super Bowl, drawing attention to the Enrolled Agent (EA) credential... For more info, see www.whatisanEA.org.
EAs are the ONLY federally licensed tax professionals!

Questions to Ask When Shopping for a Tax Professional (NewsUSA) - Although you may not have received all of your tax documents yet, it's not too early to start looking for someone to prepare your tax return. Remember, not all tax preparers are created equal. So, when shopping around, ask yourself a few important questions:

If you are getting your taxes done at a place that has someone out front dressed in a costume, it's time to rethink where you are going. A costume party is fine on Halloween but not for your taxes! Check with an Enrolled Agent who is a tax professional!

It's almost the end of the year: remember IF you have paid anyone $600 or MORE in the course of your business (ie a hair dresser renting a booth from a salon, a business owner paying rent to a landlord, etc), you are required to issue that person a 1099 by January 31, 2014. If you do NOT and you get audited, you not only lose the deduction, but will also be fined! Contact me if you need help with issuing a timely 1099.

https://www.facebook.com/photo.php?v=481488701921557

Don't pay the large tax franchise offices their expensive fees to file your taxes this year! Support a local business, local person and most importantly, a friend! My fees are reasonable and what better way to support a local business? Walk into those big box tax prep firms and ask them: "What have you done for the community lately?"

THANK YOU to all my clients and riends that have 'liked' my business page. If you are so inclined, you can also visit my yelp page and leave a nice :) comment there too. Thanks
http://www.yelp.com/biz/sharyn-scarrott-ea-fairfield-2

Sharyn Scarrott, EA Notaries in Fairfield, CA

Remember if you pay someone $600 or more in one year in the line of your business, you must issue a 1099 to them. If you get audited and have NOT, not only do you automatically lose the deduction, but you also get fined! the IRS is getting serious. If you need help in preparing 1099s, let me know! very reasonable charge!

Food for thought...don't overspend this Holiday Season and expect your IRS refund to pay off the credit card!
ATTENTION: The IRS Refund Chart is Now Extinct – Instead, the IRS states that most refunds will be issued in 21 to 75 days. Therefore, if you are one who plans on using your refund in a particular way or at a particular time, receiving it in 7 – 10 days is no longer guaranteed. The IRS only states that most refunds will be issued in less than 21 days. On the IRS website, the “Where's My Refund?” l
ink will only provide the following information: (1) Return Received, (2) Refund Approved, and (3) Refund Sent. Updates to the refund status will be made once a day, usually at night. If the Earned Income Credit is in question, the IRS will send Letter 4883C (Potential Identity Theft in Original Processing). Those returns will generally face a 75-day processing time.