Montagna & Associates, Incorporated

In some tax debt circumstances, you may qualify for a period of up to 12 months to make a lifestyle adjustment, and reduce your living expenses to come into line with IRS expense limits. This will often involve selling luxury homes and getting rid of toys such as cars and boats. Keep in mind that these items are all covered by your tax lien, so any proceeds from the sale of these items technically is owned by the IRS and should be paid over to them. A good tax representative can assist you with structuring these sales so that both you and the IRS get something out of it.

According to multiple sources, as well as our oh-too-personal experience, the IRS has run at a limited capacity during 2020, and even into 2021, which has caused a major backlog in its ability to process tax returns and send out stimulus checks. Although the IRS is now running at an increased capacity and processing mail, tax returns, payments, refunds and correspondence ... the pandemic continues to cause delays in many services. The IRS said it's issuing most refunds "in le...ss than 21 days", but many are taking longer. Some 2020 returns require review -- such as determining recovery rebate credits, amounts for the first and second stimulus checks or figuring earned income tax credit and additional child tax credit amounts. We have seen refunds taking longer even when this is NOT the case. You can always track your refund status by going here... https://bit.ly/3x6ARHT

Some of the new Child Tax Credits will come in the form of advance payments, via direct deposit or paper check. Taxpayers can expect to receive up to $300/month per qualifying child on July 15, August 13, September 15, October 15, November 15 and December 15. The remainder of the credit can be claimed on 2021 tax returns.

Did you know that the federal government taxes crypto like property? Yep, they look at it the same way they look at houses, cars, paintings, baseball cards... So, say you buy "bitcoin" (or any other kind of cryptocurrency) today for $10K, sell it in December for $30K, take some transaction costs (something like 10%) into consideration, and you’ve made a pretty $17K profit in 2021. Now, it's time to pay the capital gains tax on it. And since you held the "bitcoin" for less tha...n 12 months, your capital gains tax is going to be the same as your normal income tax rate. Something to keep in mind while you're out there trading and selling in the volatile world of crypto markets.

We want to encourage struggling businesses out there. Almost every successful business owner we know has crashed and burned at least once in their career. Entrepreneurs know that hard work and a great idea don't guarantee success. In this season, but really in every season. Keep going. Try again.

This is what you'll need to bring in for your tax appointment this year. This list has been updated to reflect both stimulus bills and their respective benefits.

Q&A on the PPP Question: If I received the "grant" portion of the EIDL, is this considered taxable income? Answer: No, it is not taxable income.

Q&A on the PPP Question: If I received the first PPP, should I include this number in calculating whether I "lost 25%+" to qualify for the second round? Answer: As you might remember, the requirement in order to receive a second PPP is that the small business has less than 300 employees and can demonstrate a revenue reduction of 25 percent. But that revenue reduction figure should NOT include any funds from the first PPP.... Also, you can calculate this either by quarter, or by fiscal year -- whichever is more advantageous. Many area small businesses need help with these calculations ... that’s what we’re here for.

We like to have a little fun laughing at the newest TurboTax commercials that pop up this time of year. Last year, it was "all people are tax people". This year, they're promoting their "live" feature with commercials of a floating desk answering various deduction questions. It's clever, but it glides over what it is and isn't -- relying upon software to do your taxes can be a very expensive mistake. And that's not even mentioning the armies of bored, underpaid "tax experts"... who are "at your disposal", apparently. Every year, we unwind the messes of clients who went this self-prepared, software route -- and who ended up owing money they shouldn't have. If this is you, no shame -- we'll fix this stuff for you and figure out if you do in fact owe what they say. Even if you do, we have ways of helping to even get that number reduced.

There are some significant actions you can take NOW to positively affect your 2020 tax filing next year. (Read: to keep more money in your pocket.) 1) Look ahead to 2021 -- project what your income might be, then make withholding and tax moves accordingly. 2) Adjust your withholding -- you still have 1-2 paychecks to catch up on any overpayments or underpayments for this year.... 3) Spend down your FSA (if you have one) -- don't let these funds go to waste. 4) Give to charity -- even if you take the standard deduction, you can ALSO deduct up to $300 in cash giving. DO IT. 5) If you can, give tax-free gifts to family -- if you have means, this is the simplest way to avoid estate taxes. You can give up to $15K tax free. 6) Max out workplace retirement accounts -- if you still get this sort of perk, you only have a couple more weeks to maximize it. 7) Gather your virtual currency docs if you have them. The IRS is scrutinizing these starting NOW.

We're looking for some good news today. Post a link to a feel-good article or post in the comments, and let's all dwell on some positivity together.

If you have ANY cryptocurrency transactions in your history, you must make sure that they are properly reported. Just because it's encrypted ... doesn't mean that it's not taxable.

To answer the questions we often get around here from clients facing tough times, this video summarizes a step-by-step process which we often help people work through.

Good news? "The US economy added 1.37 million jobs in August ... the fourth consecutive month of job growth. Additionally, the US unemployment rate in August fell to 8.4%. This mark was down from 10.2% in July and better than April's historically high 14.7% unemployment rate that happened to be the highest on record since the Great Depression. Still, the number of permanent job losses increased by 534,000 to 3.4 million, inspiring more Americans to pursue their own start-up ventures."

You must save all the financial documentation used to create your tax returns, in order to defend yourself in the case of an audit. The IRS is one of the few courts where failure to produce proof of your claims results in the assumption that you are guilty of tax fraud. This is part of the reason why you ALWAYS want a professional on your side in these matters. Would you go to court without an advocate? Would you go before a court with a software-generated defense?... "Your honor, here is my lawyer, Siri."

If your business took a PPP loan, there isn't any tax benefit to be gained by delaying the forgiveness process. So ... it's a good idea to start on that. We're here to help.

The IRS has apparently caught up on processing their backlogged mail that stacked up during COVID closures. Or, good enough, they say. They are now resuming the mailings of tax-due notices to taxpayers with outstanding tax bills. If you receive one of these notices, give us a call immediately.

Keeping personal and business separate is extremely important for your taxes. While there is some room for dual purpose expenses, far-reaching claims are easy pickings for IRS auditors.

Here's what happens when you allow bot software to do things that only humans should. This movie script was the result when a man asked a bot to watch over 1,000 hours of Hallmark Christmas movies and then write a Christmas movie script of its own. So ... do you really want software to determine how well you are doing with your taxes? Didn't think so.

"Hope someone can use some of these baseballs in the batting cages. I found them cleaning my garage. I pitched them to my son and grandson for countless rounds. My son is now 46 y/o and my grandson is 23 y/o. I am 72 and what I won't give to pitch a couple of buckets to them. They have both moved away. If you are a father cherish these times. You won't believe how quickly they will be gone. God bless P.S. Give them a hug and tell them you love them every chance you get."

Don't look for further widespread penalty relief when it comes to your IRS debt. There are, however, certain relief requests that can be submitted and that will be handled on a case-by-case basis.

A new QR code feature aims to help you access your taxpayer account info easier when receiving an overdue tax notice from the IRS. If you just need help setting up logistics to pay your bill, this will help you. But if you do not agree with their numbers or you can't pay, you will still want professional assistance.

The problem with "Googling for financial advice" is that you'll often get the blandest or reheated leftovers for advice. The "content farm" websites out there churn out the same old information, and it's simply not applicable in every situation. That's why it's always helpful to have someone who can speak into your specific situation. (Which, ahem, is what we're here for.)

There's lots of tax talk in this election season, as in every other, as both candidates are making promises about their tax policies. The BEST advice we can give about what to do for your individual and business tax plan right now is: wait and see. If new tax legislation is passed in 2021, it probably won't be effective until 2022. Congress very rarely makes tax changes that are retroactive. So ... wait and see. Then, we will listen together to see what whichever President we have says about their tax plans ... and react accordingly.

The IRS recently ruled definitively that expenses paid for with PPP proceeds are NOT deductible. This has been an open question, and it is STILL a bit of an open question ... but what they clarified is that the timing of the forgiveness won't affect the tax treatment of these expenses. Essentially, if a business "reasonably believes that a PPP loan will be forgiven in the future", expenses related to the loan aren’t deductible whether or not the business has filed for forgiv...eness. But also -- if a business does NOT apply for forgiveness, or is denied, those expenses will be deductible. It's worth a conversation with us for planning purposes if you need guidance.

Organizing your financial world can feel like a daunting task, but some SIMPLE steps will go a long way. Watch our video -- doesn't this seem really doable?

Tackling tax debt can be overwhelming, and many people don't face it head on. But taking small, simple steps goes a long way. Get the ball rolling, and you might be surprised at the progress you make. (And we can help.)

With the increased standard deduction this past year, some smaller charities began to see a decrease in donations. This year might be worse. Which means that you if you HAVE the "means", this is a great year to consider giving. In a tax-advantaged way, of course.... And since it's Giving Tuesday, it's a great day to go ahead and head over to your favorite charity and make it happen.

The day has come. All 2019 returns that were given an extension to file are due to be submitted today, which means our most recent marathon is coming to an end. Next tax season is now not so very far away (along with the tax ramifications of what THIS tax season delivered). Are you ready for that? You will be ... with our help.

A financial tip on this Cyber Monday: Don't spend money you don't have. Which is especially tempting when shopping online, with a credit card, during "the best prices of the year". Stick to a budget, and resist the drama that retail marketers create.

We've been telling you about some tax professional rumors circulating about "automatic forgiveness" for PPP loans under $150K. Well, they did it! Except it is for even smaller loans (under $50K). And it's not "automatic", but it is very, very easy. Here is the simplified application if your loan falls in that category. https://bit.ly/318OOYh

This is a year in which your local, small businesses need your support more than ever. So let's get out there and shop small tomorrow. We certainly will!

Here are some questions to consider for your 2020 taxes that will set you up for long-term success. We're here to help you walk through these answers and how to affect your tax status in a positive way. 1) Have you had a significant change in your wage income this year? 2) Have you taken capital gains or losses this year? Are you planning to? 3) Did you start or sell a business this year?... 4) Did you purchase real estate? 5) Did you make your full contributions to retirement accounts? 6) Have you considered a Roth IRA? 7) Did you withdraw from retirement accounts, and for what purpose? See more

Extension deadline is on THURSDAY, folks. Filing a tax return late (without reasonable cause) results in a 5% late FILING penalty (on whatever it is that you owe -- and the IRS will figure it for you if you don't), and an additional 5% for every month you wait to file. PLUS there is an additional 0.5% to 1% late PAYMENT penalty (per month) on whatever it is you owe. NOTE: this is ON TOP of late filing penalties. Then (yikes), interest accrues on both the late tax filing penal...ties AND the late payment penalties. That's a lot of penalty. And at least the first one is completely avoidable. If you can't pay the tax due on October 15, still file ... and talk to us about helping you set up an installment agreement or working out an offer in compromise to cover what you owe.

This is a year in which we might not feel so ... ready ... to take a day to focus on being thankful. But let's try. We'll start: We are thankful for a profession that enabled our office to provide REAL help and REAL guidance during a time of REAL need in our nation. We feel like we made a difference in the lives of our clients and friends this year, helping to be a light of direction and guidance in uncharted territory.... While we grieve over the economic realities facing us all, we are thankful for an opportunity to make a real difference in the midst of it. Now ... how about you?