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Archives for July 2022

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Understanding Tax Relief

For those that don’t have the money to pay their tax bills in full, the IRS offers tax relief programs. The initiatives help taxpayers settle tax-related debts for less than the total amount, thereby preventing liens from being placed on their assets. They typically utilize a monthly repayment plan.

Tax relief programs won’t eliminate the money owed to the IRS, but it will help make it easier to repay. The IRS will charge interest on any unpaid taxes, along with a setup fee for its programs. To qualify for a long-term repayment plan of more than 120 days, individuals must owe $50,000 or more in taxes, penalties and interest.

Individuals that have been affected by natural disasters have access to tax relief initiatives. People should consult a tax specialist that’s knowledgeable in the regulations and forms required to take advantage of specific programs.

The IRS is currently offering tax relief programs to victims of wildfires, straight line winds, landslides and mudslides, flooding, tornadoes and hurricanes in certain areas. The tax relief initiatives provide extra time for taxpayers to file their federal return, pay their taxes, and file any required forms.

Another initiative of the IRS is penalty relief/interest abatement. Under the program, the IRS may forgive any penalties charged to the person’s tax bill, providing they meet certain criteria. Individuals will still owe their taxes, but eliminating penalties can save a substantial amount of money.

There are also companies that negotiate with the IRS on behalf of a client. Their fees can run into thousands of dollars and there’s no guarantee that they’ll be successful. Individuals should be wary of upfront fees, undesirable refund policies, and default billing if they decide to cancel.

The best option for those seeking tax relief is to engage the services of a qualified tax professional that has the authority to represent individuals with the IRS. Those include a CPA, attorney, or federally authorized tax practitioner.

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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When Can You Deduct Mileage

One of the many deductions possible on your federal income taxes is mileage driven for work-related endeavors if you use your own vehicle. Those deductions can be taken if you’re self-employed. It’s also possible to deduct mileage if your employer requires you to travel using your own vehicle – providing the employer doesn’t reimburse you for mileage.

There are two ways to calculate the mileage. The first is based on the business-related percentage of the total miles driven. The second method is by multiplying the miles you drive for work by the IRS’s standard mileage rate. The rate changes each year. In 2022, the IRS increased the mileage rate to 62.5 cents per mile due to soaring gas prices.

There are a great number of jobs in which an employer expects the employee to use their own vehicle as part of the job. They include delivery drivers, salespeople, couriers, service techs, reporters, on-demand shoppers, and ride-shares. You can also claim mileage for medical-related reasons and charitable driving.

A key component for claiming mileage is keeping a detailed record of the date, miles driven with the beginning and ending mileage stated, and the reason. There are apps that will do this. The IRS may demand to see a logbook of the miles traveled to determine if you’re eligible for the deduction. While it’s unusual for the IRS to do so, they have the option of doing so.

If an employer requires you to use your personal vehicle for work, but doesn’t reimburse you for mileage, you can claim the mileage by the actual number of miles or the IRS’s standard mileage rate. It’s a lot more complicated if you have an employer that reimburses you for mileage. You’ll first have to know if the company’s reimbursement policy is an accountable plan.

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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Avoid Being Scammed Online

There are thousands of scams being perpetrated each year. Most victims are the elderly, but a substantial number of younger individuals are also affected. The scams may work by eliciting an emotional response or promising a financial return. They all have the same goal – to strip people of their money and peace of mind.

Scammers try to gain trust by claiming to be from a person or organization with which the victim is familiar. Others try to instill fear, such as a suspension of an account, threats of being arrested, utilities being shut off, or that the victim’s account has been compromised.

Scammers will attempt to make their victim take immediate action, pay in gift cards, or make wireless transfers. There are a number of precautions that individuals can take to protect themselves from being scammed.

Security Software

Install security software on all computers and mobile devices. Turn on automatic updates to ensure they’re protected against the latest threats.

Passwords

Create strong passwords that are at least 8 characters in length, includes a mix of upper- and lower-case letters, at least 1 number, and a special character. Password protection also applies to home internet connections. Secure home routers with a password and use extreme caution when connecting to public Wi-Fi networks.

Phishing

These scams use emails and fake websites to trick people into providing personal information. Don’t disclose personal information online, click on links in emails, or disclose login information. Report these to the Federal Trade Commission and to the organization being impersonated.

Personal Information

Never provide personal information on social media sites and lock down privacy settings. Scammers can glean a lot about people through their social media profiles. Don’t accept friend requests from unknown people.

Safe Shopping

Make sure the online shopping website’s address begins with https, indicating it uses secure technology. When checking out, make sure https is part of the address and/or check to see if a padlock symbol is visible on the page.

Privacy Policies

Read the website’s privacy policy to see how it protects personal information that’s collected and if it shares that information with third parties. If the policy isn’t easy to understand or not provided, consider going elsewhere to shop.

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 is Mortgage Tax Calculated?

Not to be confused with interest rates on a mortgage or ongoing property taxes to be paid each year, a mortgage recording tax is used to document a loan transaction. It’s a fee that’s paid when someone takes out a mortgage. There are currently eight states that charge a mortgage tax and one of those is Florida. Numerous lending institutions offer online mortgage tax calculators that perform the financial calculations.

Individuals can do the math themselves by taking the total amount being borrowed and dividing it by 100. Then round up that number to the nearest whole number. Local laws may allow for a deduction to reduce the amount.

Florida residents pay 35 cents per $100, based on the amount of debt being incurred on the mortgage. However, that amount can vary among counties and a surtax may also apply. It’s customary for the seller to pay the tax, though that isn’t a mandate. The real estate agent is responsible for securing a check for the amount before the deed is recorded.

Failure to pay the amount promptly can result in the state assessing a monthly penalty fee. A floating interest rate may also be placed on any unpaid document. Parties exempt from the tax include state and federal government agencies, political subdivisions, and Florida counties and municipalities. When an entity is exempt from the tax, the other party must pay it.

Many types of deeds require this documentation, including warranty and quit claim deeds, easements, and contracts for mineral, timber, gas and oil rights. A mortgage tax is also collected if an individual refinances. However, a mortgage reassignment can transfer the original mortgage tax to the new lender. Not all lending institutions will do this, but if the lender agrees to do so, it can save individuals a significant amount of money.

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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