IRS Issues Several Reminders for the 2022 Tax SeasonNews, Offshore Account Update
Posted in on February 14, 2022
With Tax Day right around the corner, the Internal Revenue Service (IRS) has issued several reminders for U.S. taxpayers. In this article, Maryland tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, summarizes some of the key information taxpayers need to know.
IRS: Taxpayers Need to Collect All Relevant Documents and Should Consider Relying on Tax Professionals
The IRS is encouraging taxpayers to ensure that they have all relevant documents before preparing and filing their annual tax returns in 2022. This includes proof of income such as W-2s and Form 1099s, as well as letters received from the IRS. In particular, the IRS recommends that taxpayers, “review Letter 6419, 2021 Total Advance Child Tax Credit Payments, and Letter 6475, Your 2021 Economic Impact Payment, for their total payment amounts to help them file an accurate return.”
The IRS also encourages taxpayers to hire tax professionals to help them if necessary. But, when hiring tax professionals, taxpayers should do their research to avoid scams, and they should ensure that they are providing all necessary information. Tax professionals can only work with the information they have; and, if a taxpayer fails to provide any information, this could result in an inaccurate return being filed. Don’t forget: Even taxpayers who hire tax professionals are ultimately responsible for ensuring the accuracy of their returns.
Are Your Social Security Benefits Taxable?
On February 9, 2022, the IRS published a Tax Tip reminding taxpayers about the potential tax consequences of receiving Social Security benefits. As the IRS explains:
“To determine if their benefits are taxable, taxpayers should take half of the Social Security money they collected during the year and add it to their other income. . . . If they are single and that total comes to more than $25,000, then part of their Social Security benefits may be taxable. If they are married filing jointly, they should take half of their Social Security, plus half of their spouse's Social Security, and add that to all their combined income. If that total is more than $32,000, then part of their Social Security may be taxable.”
Depending on a taxpayer’s (or couple’s) income level, up to 85 percent of their Social Security benefits could be taxable. As with all forms of tax liability, failure to pay federal income taxes on Social Security benefits – even if unintentional – can lead to interest, fines and other penalties.
Don’t Try to Hide Your Tip Income from the IRS
The IRS wants taxpayers to know that they can face significant penalties if they try to hide their tip income on their annual returns. Employees must report their tips to their employers in most cases, and employers must report their employees’ tip income to the IRS. The IRS is also reminding taxpayers that, “The value of non-cash tips, such as tickets, passes [and] other items of value is also income and subject to tax.”
IRS Trouble? Contact Maryland Tax Attorney Kevin E. Thorn
If you run into trouble with the IRS, Maryland tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, can help. To discuss your situation with Mr. Thorn in confidence, call 240-235-5096, email email@example.com or request an appointment online today.Share This Post