Michael S Stoughton CPA

If they can’t get the job done, maybe they should be disbanded and start over. This is such a debacle.

IRS destroyed 30M paper information returns due to backlog The Internal Revenue Service decided to destroy an estimated 30 million paper-filed information return documents in March 2021 because of its inability to process its backlog of paper tax returns, according to a new report.

With preparations for the next tax season starting there is something important you should be aware of.

The IRS will be sending out two letters to taxpayers in January:

Letter 6419 - Advance Child Tax Credit Payments
Letter 6475 - Economic Impact (stimulus) Payment


It is important that clients retain these letters. Entering incorrect advance child tax credit or economic impact payment amounts will cause delays in tax return processing and the issuance of refunds.

Well this was an interesting tax season...That's all I'll say. Hope you all have a great day.

Today the IRS announced they are looking to extend the federal tax deadline to mid-May. The extension will be roughly 30 days; it is unclear at this point if the deadline will fall on May 15 (which is a Saturday) or May 17.

Looks like my tax season will be one month longer this year. IRS says they are extending until Mid-May.

Well it looks like it is going to be a long tax season...Several tax returns rejected due to a "return was already filed and accepted by the IRS" Ugh to the nth degree!!!

Well, I just finished the longest tax season of my career. Let's hope 2020 tax season is not as long.

I have just published my website located at www. michaelstoughtoncpa.com I have also added a new contact email at [email protected] Have a great day...

Tax & Accounting Services You Can Rely On Michael has been serving the business community for the last 20 years. I am a member in good standing with the American Institute of Certified Public Accountants and The Connecticut Society of Certified Public Accountants. 

Credited to my former business partner...Good info:

OTHER EXCITING PROVISIONS FROM THE BIG GIVEAWAY...

1. The normal 10% penalty for early retirement plan distributions is waived (on up to $100,000 withdrawn) if...

a. You, your spouse, or your dependent was infected with COVID-19. - or -

b. You experienced adverse financial consequences from being quarantined, furloughed or laid off, or had to quit for lack of child care.

ALSO - the default is to spread this extra income over three years!

PLUS - any amount withdrawn may be repaid to the plan for up to 3 years!

2. Required minimum distributions (RMDs) from retirement plans are waived for 2020!!

3. WOW!! A $300 "ABOVE THE LINE" CHARITABLE DEDUCTION!! Now that's incentive to be generous. This means that, even if you don't itemize (as many of us no longer do), your donations in 2020 will be helpful information, at least up to $300 worth. Since this reduces Adjusted Gross Income (AGI), I'm now curious as to how CT will react to this.

4. Increased limits on deductibility of contributions as a percentage of AGI for individuals, as well as those on corporations.

Credited to my former business partner...Good info:

ABOUT THOSE STIMULUS CHECKS!

1. THE AMOUNT - $1,200 for a single person (including head of household status) and $2,400 for a married couple filing jointly. Plus you get $500 for each child you claimed for the Child Tax Credit. Sounds like 17 & up will not count if the child tax credit is the basis for this.

2. THE PHASE-OUT - It is tentatively calculated based on your 2019 income tax return. If that hasn't been filed yet, they will use the 2018 return. For a single person, the phase-out range starts at $75,000 of ADJUSTED GROSS INCOME (double that for a joint return). For a head of household, it starts at $112,500. The phase-out is 5% of your excess income (without kids, the stimulus is gone if your AGI was $99K single, $136,500 for heads of household and $198K joint. With kids, the phase-out continues until the kids' stimulus disappears as well.

3. HINT!!! If you have already filed, let's hope that your income was below the phase-out range. If you haven't yet filed, here's a golden opportunity. If your income went down from 2018 to 2019, putting you in a better position for the stimulus, FILE NOW! But if your income will be higher in 2019, to a point where you start to lose the stimulus, wait to file until you have your stimulus in the bank!

This is a 2020 refundable credit, to be reconciled when you do your return next year. If it turns out that, based on 2020 information, you got shorted, they will pay you the difference. However, if they overpaid you, you are FREE AND CLEAR!! Woo-hoo!

My suggestion to all my clients that normally get a refund, make your appointment or send your info now. Everyone else that normally owes...wait until May or June...I hope everyone doesn't come in July...Be well and stay heathy.

The ever changing tax situation...

Americans will have an additional three months to file their taxes amid the coronavirus pandemic, the US treasury secretary said on Friday.

"We are moving Tax Day from April 15 to July 15," Secretary Steven Mnuchin tweeted. "All taxpayers and businesses will have this additional time to file and make payments without interest or penalties."
He said he was acting at President Donald Trump's direction.
The White House had announced previously they were deferring tax payments for 90 days, but that Americans would still need to file by April 15.
Now, the deadline will be extended into the summer.
Mnuchin said Americans with refunds should still file now.

Well, well, well....

March 18, 2020

The Treasury Department and the Internal Revenue Service are providing special payment relief to individuals and businesses in response to the COVID-19 Outbreak. The filing deadline for tax returns remains April 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can't file by the April 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request a six-month extension to file their return.

This payment relief includes:
Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.

Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.

This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.

Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.

The IRS reminds individual taxpayers the easiest and fastest way to request a filing extension is to electronically file Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses must file Form 7004.

This relief only applies to federal income tax (including tax on self-employment income) payments otherwise due April 15, 2020, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details. More information is available at https://www.taxadmin.org/state-tax-agencies.

State Tax Agencies

Well, not to make light of the corona virus issue, but tax accountants have been quarantined to their desk from February 1st to April 15th every single year...Where is the love???

Talk about waiting until the last minute...

DRS extends filing deadline for certain annual state business tax returns

Consistent with the emergency declarations signed by Governor Lamont, the Connecticut Department of Revenue Services (DRS) is granting an automatic extension of Connecticut filing deadlines for certain annual state tax returns as a result of the COVID-19 outbreak.

Effective immediately, the filing deadlines for certain annual tax returns due on or after March 15, 2020, and before June 1, 2020, are extended by 30 days. In addition, the payments associated with these returns are also extended to the corresponding due date in June.

The impacted returns and the associated filing dates and payment deadlines are set forth below:

• 2019 Form CT-1065/CT-1120 SI Connecticut Pass-Though Entity Tax Return – filing date extended to April 15, 2020; payment deadline extended to June 15, 2020

• 2019 Form CT-990T Connecticut Unrelated Business Income Tax Return – filing date extended to June 15, 2020; payment deadline extended to June 15, 2020

• 2019 Form CT-1120 and CT-1120CU Connecticut Corporation Business Return - filing date extended to June 15, 2020; payment deadline extended to June 15, 2020

Additional updates will be posted to the DRS website.

Feeling much better today...worked from before 7am until 11:15pm. Great day to do taxes. Now to bed so I can do it all again tomorrow!!!

So now that the Corona virus is keeping me inside, oh, that right, it's tax season...I am chained to my desk each year...Ha ha. Hope all are safe and healthy.

I hate getting sick during tax season...it slows me down...Ughhhh!!!

A little over 8 weeks left to file your taxes on time...Set up your appointment as soon as you can to ensure timely filing!

Well, everyone should be getting their W-2's and 1099's...Schedule your appointment early so, if you get one, you can get your cash(refund) before the government runs out of money...Ha Ha.

Wow, my first client tax return e-filed received their federal refund in about a week...That's better than in the past.

Tax season is nearly upon us. Start looking for those "Important Tax Documents" to come in the mail and make an appointment today. I look forward to servicing my existing clients as well as many new clients. Word of mouth advertising is clearly the best. If you are an existing client, feel free to recommend me to your family and friends.