Tax Den

If you received your stimulus payment on a prepaid debit card and haven’t activated it, you can’t claim the credit on your tax return, the IRS says. The IRS considers that money paid. The debit card doesn’t expire until 2023. The funds will remain valid on the card and accessible once you activate the card, the IRS says. If your card is lost or was tossed out by mistake, you can request a replacement by contacting MetaBank at (800) 240-8100. When you call, ignore the instructions to press Option 1 to reach customer service. Instead, choose Option 2 for a lost or stolen card. Then select Option 1 to input the last six digits of your Social Security number as well as your Zip code. From there, you should be transferred to a person in customer service. Then you have to answer some security questions before a replacement card is mailed.

One of the questions I was asked yesterday from a client was: Why are IRA limits so much lower than those for 401(k) plans? There is actually a good answer, but it never leaves people feeling good about our retirement system. To be clear, the difference in the limits is unfair: People lucky enough to have a plan at work can contribute $19,500in 2020 to fund their retirement, while those without a plan can only contribute $6,000. That doesn't even include the employer match (i...f there is one), which further increases the assets that workers with a 401(k) can save each year. However, that unfairness is a feature not a bug of the U.S. retirement system. Policymakers believe it is necessary to maintain this unfairness because extra tax incentives induce employers to offer a retirement plan when they otherwise might not. The delicate balance of incentives in the retirement system require 401(k)s to be more attractive than IRAs. At least that's what Congress, which writes the Internal Revenue Codes, believes, and the theory has never been tested since the gap has existed for 40 years since the creation of the 401(k). So, here is the logic behind making 401(k)s much more attractive than IRAs in more detail. Without this gap in tax benefits, many employers would not feel like they needed to offer a plan. Particularly if the decision-makers at a company and higher-paid employees could get the same benefits outside of a 401(k), they would be less interested in it as a benefit.

The Internal Revenue Service (IRS) is often considered to be every taxpayer’s big bad wolf, but in the case of the OIC, the IRS is more akin to a fairy godmother. When a delinquent taxpayer applies for and receives an OIC, the IRS forgives all of their debt in exchange for a one-time payment or several installments of a small portion of the balance. This fairy tale as assisted many taxpayers in obtaining a fresh-start and a brighter outlook for their financial future.

We are truly grateful to you for choosing us as your tax preparation company for all these years and giving us the opportunity to grow. As a way of saying thank you, you will receive 10 percent off our regular invoice during the months of February and March. You moved? No problem! We can still take care of you remotely. We have clients in all 50 states. We look forward to working with you from our new location!

My name is Fahim Choudhary and I am the owner and tax preparer at Tax Den. I have been a business owner and tax professional for more than 15 years - having started my first tax practice in 2003. I won't be so bold and say that I have seen and done all in that time, but I will be honest and admit that the surprises are getting to be fewer and fewer each year. Being an owner has afforded me the opportunity to work with a broad range of client types and in turn address a wide... scope of tax (and financial) issues. With each subsequent year and each subsequent tax return - I am able to bring that exposure and expertise to the work I perform for every one of my clients. It is easy to (mistakenly) think that the tax business is solely about crunching numbers and pushing paper. Being good with numbers and understanding the preparation and filing process is critical, but so is establishing a quality, working relationship with your clients.