Blog Archives

Where's My Refund?

3/31/2023

The popular Where’s My Refund feature on the IRS website allows you to see the status of your refund after filing your income tax return.

What you should know

Refunds of e-filed returns usually take 10 to 21 days to process. Paper returns take longer than e-filed returns. The IRS states that 90 percent of refunds are processed within this 21-day time period.
Original refund processing projections can change. This can be due to processing backlogs, or errors on your tax return.
Sometimes a delay is a good thing. The IRS acknowledges there is a huge increase in identity fraud as thieves attempt to steal tax withholdings. The IRS is using their data match programs to catch as much of this illegal activity as possible. Because of this, if the IRS is suspicious that there is fraudulent activity, they will hold up processing your refund.

Checking your refund status
In the meantime, if you'd like to check on the status of your refund, visit irs.gov/refunds and click on Check My Refund Status.
When to check

24 hours after an e-filed tax return confirmation is received
4 weeks after a paper-filed tax return is mailed

What you need to provide

Social Security number
Filing status
Exact refund amount

Remember, the information provided to you by the IRS is not a guarantee of payment. So please resist the urge to spend your refund before receiving it. Unfortunately, no amount of calling or checking will change the speed of returning your money. With 150 million tax returns processed each year, sometimes all you can do is wait.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.

The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area.

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.

We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com.

For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA; Janice Papais, CPA

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Audit Target: The Sole Proprietor

3/17/2023

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Each year the IRS publishes their activities in a publication called the Data Book. And each year for the past number of years the number one target of audits are those tax returns with a Schedule C for small business activity. So how can you prepare yourself for a possible audit? Here are some tips.

Keep records separate. The quickest way to get a business deduction disallowed is to blend your personal bills with those from your business. Instead, consider opening a separate checking account and use a separate credit card for business expenses.
Keep logs. Keep a logbook for business miles, as well as business meetings and meals. Include the date, time, subject, and who was present at the meeting.
Ordinary and necessary. Two key words to use to qualify legitimate, deductible business expenses per the IRS are:
Ordinary: An expense that is common and accepted in your industry.
Necessary: An expense that is helpful and appropriate for your business.
Business not hobby. A qualified business activity allows for direct deductibility of appropriate expenses, whereas hobby activity expenses are generally disallowed. There are many facets to this situation, but to stay away from the hobby problem, you need to have a profit motive and active participation in the activity to qualify your activity as a business.
The IRS will know. Starting in 2023, the IRS is requiring third-party payment providers to submit 1099-K forms for all activity over $600. This means if you take credit cards or use digital payment tools to accept payments from customers, the IRS is going to be looking for a business tax return. So keep good records!

Just because the IRS focuses their audit activities in this area does not mean you should be reluctant to take appropriate deductions. Just be prepared to defend your position with excellent records.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.

The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area.

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.

We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com.

For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA; Janice Papais, CPA

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The Marriage Penalty is Alive and Well

3/13/2023

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Despite what you may think, the marriage penalty is still alive and well. Whether you’re changing your filing status in 2022 because of marriage, divorce or another event (or even if your filing status staying the same), you should review this information and plan accordingly.

What is the marriage penalty?
The marriage penalty occurs when the dollar ranges for married taxpayers (joint filers) are not exactly double the dollar ranges for single taxpayers. It results from the way the graduated tax rate system works, based on your tax filing status and other tax return items. Married taxpayers are often taxed more than they’d be as two single filers.

Situations subject to the marriage penalty

Both spouses with high incomes. A disparity for the dollar ranges still exists for the two top tax brackets of 35 percent and 37 percent. That means that the marriage penalty often applies to high-income couples. Wealthy couples may save money by avoiding a marriage certificate! For example, Riley's taxable income was $400,000 per year, while Avery's annual taxable income came in at $300,000. Before getting married, Riley's tax bill using the 2022 tax brackets would be $113,753 using a single filing status, while Avery's tax bill would be $78,753, for a combined tax liability of $192,506. Once they marry, Riley and Avery would have a tax bill of $193,549 using married filing joint tax brackets.
Local taxes over $10,000. Legislation also limits the annual deduction for state and local tax (SALT) payments to $10,000. This limit is the same for a married couple as a single taxpayer. For instance, assume that a couple pays $25,000 in property taxes in 2022. As joint filers, their deduction is limited to $10,000, whereas they could write off a total of $20,000 if they were both single filers.

Tax-planning opportunity
While no one is saying you should get married or divorced because of the marriage penalty, factoring it into your tax planning can make a big difference. Please call if you wish to review your situation.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.

The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area.

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.

We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com.

For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA; Janice Papais, CPA

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The IRS offers easy and convenient options to make federal tax payments

3/8/2023

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Anyone who needs to pay their federal tax bill has several ways to send a payment to IRS quickly and securely. Knowing the options to make payments helps taxpayers meet their tax obligations.
Here are several ways people who owe taxes can pay it. They can:

Pay when they e-file using electronic funds withdrawal to draw the payment directly from their bank account.
Sign into their Online Account to pay their 2022 balance or make estimated tax payments. Taxpayers can also see their payment history, any scheduled or pending payments, and other account details.
Use IRS Direct Pay to pay electronically directly from their checking or savings account. They can choose to receive email notifications about their payments when they pay this way.
Pay using a payment processor by credit card, debit card or digital wallet. Taxpayers can make these payments online for a fee.
Make a cash payment at more than 60,000 participating retail locations nationwide. To pay with cash, taxpayers should visit IRS.gov and follow the instructions.
Pay over time by applying for an online payment agreement. Once the IRS accepts an agreement, taxpayers can make their payment in monthly installments.

For details on these options, people can visit irs.gov/payments.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.

The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area.

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.

We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com.

For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA; Janice Papais, CPA

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The Tax-Free Retirement Savings Option

3/3/2023

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Is a Roth IRA right for you?

If you are looking for tax-free income and more flexibility during retirement, perhaps you should look into investing in a Roth IRA. While Roth IRA contributions are not sheltered from current taxes like contributions to traditional IRAs, they offer other tax benefits during retirement.

The Roth IRA advantage

Retirement withdrawals (including earnings) are tax-free. As long as you wait to take distributions until you are 59 ½ or older, the full amount of your Roth account is tax-free!
Save taxes on other earnings. During retirement, withdrawals from traditional IRAs increase your taxable income. This can bump other earnings into a higher tax bracket and potentially increase the taxability of your Social Security benefits. Conversely, Roth withdrawals are not reported as income, keeping tax rates as low as possible.
More flexibility during retirement. In 2023 and later, once you turn 73 the IRS requires that you take required minimum distributions (RMDs) from traditional IRAs. If you don’t, you’ll get hit with a 50% penalty! There is no such requirement for Roth IRAs. You can leave (and even contribute) funds to grow in the account as long as you want.
Contributions can be withdrawn tax-free at any age. If you have a financial hardship and need to make an early withdrawal, only the earnings in a Roth are subject to a 10 percent early withdrawal penalty. Meaning, Roth contributions can be withdrawn tax-free and penalty-free at anytime. This is because you use after-tax funds to make your original Roth contributions. This is not the case with traditional IRAs — the full withdrawal is subject to the penalty if you make it before you turn 59½.

The Roth IRA is not for everyone
While there are many reasons to consider contributing to a Roth IRA, they are not for everyone. Here are some factors to consider:

Income limits. While there are no income limits if you wish to roll funds from other accounts into a Roth IRA, there are income limits to contribute to a Roth IRA. For 2022 they are $144,000 single ($153,000 in 2023) and $214,000 married ($228,000 in 2023).
Contribution limits. In 2022, you can contribute a maximum of $6,000 ($7,000 if age 50 or over). This amount increases by $500 in 2023.
5-year active account requirement. To receive the full tax-free benefit of Roth investment earnings, you must have your Roth account for five years before making withdrawals.
Future tax uncertainty. While no one knows what the future holds, keeping tabs on tax trends is an important aspect of retirement planning. Increasing or decreasing tax rates may ultimately determine the best type of retirement investment for you. In addition, the government has the power to change the taxability of your IRA if they deem it necessary.

If you are looking to maximize your savings for 2022, you still have until April 18, 2023 to contribute into an IRA.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.

The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area.

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.

We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com.

For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA; Janice Papais, CPA

0 Comments

Where's My Refund?

Audit Target: The Sole Proprietor

The Marriage Penalty is Alive and Well

The IRS offers easy and convenient options to make federal tax payments

The Tax-Free Retirement Savings Option

Is a Roth IRA right for you?

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Where's My Refund?

Audit Target: The Sole Proprietor

The Marriage Penalty is Alive and Well

The IRS offers easy and convenient options to make federal tax payments

The Tax-Free Retirement Savings Option

Is a Roth IRA right for you?

BLOG

CATEGORIES​

ARCHIVES

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