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Archives for May 2022

tax preparation

When do You Need Payroll Services?

If you’re a small business owner, you may attempt to maintain your payroll with software that can be obtained anywhere software is sold. You may think you’re saving money, but you may find yourself spending more time attending to accounting and payroll tasks than operating your enterprise. Even if you only have a single employee, you can benefit from the services of a payroll processing service.

It’s important that you understand the IRS ultimately holds you responsible for all payroll requirements, even if you hire a payroll service. Do your research and choose a payroll company that meets your individual needs and has experience. Ask friends, family and other business owners which service they use and if they’re satisfied with the company.

Accuracy

A payroll service will know exactly how much in taxes to keep out for each employee and ensure their pay check arrives on time, whether pay periods are weekly or bi-monthly. The service will calculate federal, state and FICA for employees, along with creating W-2s and 1099s. It will enable you to stay compliant with all applicable state and federal laws.

Filing Requirements

Businesses are held to different filing times and requirements than private individuals. A payroll service will help ensure you meet filing deadlines and pay the appropriate tax amounts to avoid penalties and fines.

Paying Yourself

Depending upon the type of business you have, you may be required to pay yourself. A payroll service can do this and it’s especially important if you’re considered self-employed. The service will calculate your own taxes, along with personal state unemployment taxes and federal unemployment taxes.

Saves Time

Payroll is a complicated process and the average business owner spends more than 6 hours per month handling payroll. A payroll service will streamline the process, take care of all the details, and give you more time to spend on operating your business.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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Are You Eligible to Claim Child Tax Credits?

If you have children, you’re probably familiar with the Child Tax Credit. It can put some much-needed cash in your pocket, but there are criteria for qualifying for the credit.

Age and Qualifying Child

A qualifying child is one that didn’t turn 18 before Jan. 1, 2022. A qualifying child is defined as the taxpayer’s son or daughter, stepchild, eligible foster child, brother, sister, stepbrother or stepsister, or half-brother or half-sister. Descendants of those qualifying children may also qualify, such as a grandchild, niece or nephew. The child must have a Social Security number that’s valid for employment.

Financial Support

The child can’t have provided more than one-half of their own support during 2021.

Living Arrangements

The child must have lived with the taxpayer for more than one-half of the tax year. The home must have been in one of the 50 U.S. states or District of Columbia for more than half the year. A permanent home can be a house, apartment, mobile home, or temporary lodging and doesn’t have to be in the same location throughout the taxable year.

You may still be eligible for a lesser amount of money if your home wasn’t in the U.S. for more than half the year. Bonafide residents of Puerto Rico may also be eligible to claim a Child Tax Credit even if they received no income and paid no U.S. Social Security taxes.

Taxpayer Dependent

You can’t claim a child as a dependent if you or your spouse are claimed as a dependent on someone else’s tax return or are residents of Canada or Mexico. The dependent must be a U.S. citizen, U.S. resident alien, or a U.S. national. Joint custody situations only allow one parent to claim a child on their income taxes. You can also claim that child if they died before Jan. 31, 2022.

Earned Income

You must have some type of earned income during the tax year as an employee or through self-employment. It includes wages, salaries, tips, bonuses and commissions.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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How to Track Down Your Missing Stimulus Check

There are still millions of people that haven’t received one or more stimulus checks issued by the government during the COVID-19 pandemic. If you’re one of the people that are waiting, you can still receive the first, second or third stimulus checks you’re missing. The stimulus was delivered via direct deposit, by check in the mail, and by prepaid debit card that were also delivered by the U.S. Postal Service.

According to the IRS, first and second stimulus payments can only be clamed on a 2020 tax return. If you’re missing the third payment, it can only be claimed on a 2021 tax return. Individuals will need to know the amount of the missing stimulus payment they’re claiming. You can find that amount by logging into your secure IRS account online. It will provide you with the amounts of all three Economic Impact Payments made to you.

You can’t claim missing first or second stimulus payments on your 2021 tax return. If you haven’t filed an income tax return for 2020, you’ll need to file one now. If you did file a return and didn’t claim the Recovery Rebate Credit, you’ll need to file an amended return.

If you filed a 2020 tax return and it hasn’t been processed yet, don’t file a second return. The IRS is still behind on processing millions of tax returns from 2020 due to errors and lack of personnel. The IRS is also expecting significant delays in processing 2021 tax returns.

People that didn’t receive their third round of Economic Impact Payments can claim it on their 2021 tax return. You must file a federal tax return to claim the funds, even if you don’t normally file or aren’t required to file. Any funds to which you were entitled will be used to reduce the amount of taxes you owe or issued as a refund.

Using online tax preparation software and filing online will help reduce errors that can delay the return and the software will also help you determine your 2021 Recovery Rebate Credit. Depending on your individual circumstances, the stimulus payment will be used to reduce the amount of taxes owed or will be issued as a refund. You can have refunds deposited to a bank account, prepaid debit card or alternative financial product. You’ll need to provide your account and routing numbers.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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small business tax

Can You Get Tax Help for Free?

There are dozens of reasons why you need assistance with your taxes, especially if you’re doing them yourself. If you’re one of the millions that prepare their own taxes online, the services offer help in the form of popup windows, but those can be even more confusing and you may want to speak with a real person that’s knowledgeable about your particular circumstances.

You should bear in mind that the IRS was overwhelmed with calls in 2020 and again in 2021. People waited for hours on the phone to have their questions answered. That situation is likely to continue in 2022 and beyond.

Volunteer Income Tax Assistance (VITA)

VITA can be found online. You enter your zip code and the distance within which you want to find a volunteer. If you don’t find someone within your search criteria, keep expanding the distance. The online search will provide you with the name of the agency, it’s location and directions for contacting it. VITA help is available at a variety of locations ranging from colleges to community centers.

Tax Counseling for the Elderly (TCE)

To qualify for TCE, you must meet certain criteria. You’ll need to be a senior citizen, disabled, earn moderate or less income, or not be able to speak English very well.

IRS Taxpayer Assistance Center

These are IRS offices where you can search for a location where you can make an appointment to speak with an IRS representative. However, these sites can be 50 miles or more away from your location.

Taxpayer Advocate Center

The service is an independent organization within the IRS. It can be a good resource for those with a financial hardship due to a tax situation, levy or lien.

AARP Foundation Tax-Aide Program

Operated by the AARP for over 50 years, its focus is on those age 50 and older with a low to moderate income, though technically they offer help to any taxpayer.

MilTax Program

This is for current military personnel, a spouse or dependent child of someone in the military, or those who have served in the past. The organization offers help over the phone 24/7 and appointments can also be scheduled for MilTAX at a VITA office.

Local Services

Each year libraries and community centers in almost every town offers services provided by volunteers to help individuals with their tax-related questions. Some offer tax preparation seminars and workshops.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

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