January 2022 - JT Tax Services

Photo with calculator and sticky note that reads "Tax 2022"

Tax Season 2022 Has Started: What You Need to Know

January 26, 2022

On January 24, the IRS began accepting and processing tax returns, marking the start of the tax season 2022. From the date of the Tax Day this year, to some filing tips, here’s what you need to keep in mind.

6 Fast Tips for a Smooth Tax Season

Unlike most years, federal Tax Day this year will be on April 18, not April 15. This is due to the fact that the state of Washington celebrates Emancipation Day on April 15.
Begin by gathering all the documents you will need, including W-2s, receipts, canceled checks, and any other element you may need to support items of income, deductions, or credits on your return.
Filing electronically helps you avoid delays with your refund. This is particularly important considering that refunds may take longer than usual this year because the IRS is still dealing with a backlog of unprocessed 2020 tax returns (more on that later).
If you received Advance Child Tax Credit Payments or the third Economic Impact Payment, remember to include in your records the letters from the IRS you should have received between December 2021 and January 2022.
Also, if you received an Economic Impact Payment or Advance Child Tax Credit in 2021, put special emphasis on entering the amounts correctly. Inaccuracies will lead the IRS to further review your return, leading to delays .
If the IRS is still processing your 2020 tax return, you can still file your return for 2021. This presents a problem because in order to file, you’ll need the Adjusted Gross Income (AGI) from your most recent tax return. To solve this, the IRS asks taxpayers still waiting for their 2020 tax return to be processed to enter $0 (zero dollars) as the AGI value for last year.

Need Help With Your Taxes? Contact the Experts at JT Tax Services

Do you need assistance with personal or business taxes? JT Tax Services is here to help! We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email (info@jttaxservices.com), telephone (805-984-8890), or through our social media accounts on Facebook, Twitter, and LinkedIn to schedule a consultation or to learn more about our services.

What You Need to Know About Education Tax Credits

By: UNIKO Media Group

January 19, 2022

If you or someone included on your tax return are pursuing higher education, we encourage you to consider two little-known tax credits: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC), two tax breaks that can reduce the amount of tax you owe.

Education Tax Credits: What You Need to Know

The purpose of the AOTC and the LLC is to help with the cost of higher education by lowering the amount of tax you owe.

Regardless of the differences between these credits (we’ll touch on that later), three conditions must be met in order to qualify for any of them:

You, your dependent, or a third party pays qualified education expenses for higher education.
An eligible student must be enrolled at an eligible educational institution.
The eligible student is yourself, your spouse, or a dependent you list on your tax return.

On the other hand, you CANNOT claim these credits if someone else (such as your parents) lists you on their tax return; if your filing status is married filing separately; if you already claimed or deducted another higher education benefit using the same student or same expenses; or if you or your spouse were a non-resident alien for any part of the year and did not choose to be treated as a resident alien for tax purposes.

Differences Between AOTC and LLC

One of the most relevant differences between these two credits is that the AOTC, applies only when the student hasn’t completed four years of post-secondary education before 2021. Plus, the student must be pursuing a degree or other recognized education credential and must have no felony drug convictions as of the end of 2021.

By contrast, it’s possible to qualify for the LLC with all years of post-secondary education and for courses to acquire or improve job skills. Additionally, the student does not need to be pursuing a degree or other recognized education credential. Finally, the requirement of no felony drug convictions does not apply in this case.

Another important difference is that the AOTC is a partially refundable tax credit (40%), while the LLC is not refundable. This distinction is worth keeping in mind because not refundable tax credits cannot be used to increase your tax refund or to create a tax refund when you don’t have one.

If you are interested in learning more about education tax credits, contact us today. We’ll be glad to help you make sense of these tax breaks and determine if you qualify for any of them.

Need Help With Your Taxes? Contact the Experts at JT Tax Services

Remember: Make Your Tax Payment for Q4 of 2021 by January 18!

By: UNIKO Media Group

January 6, 2022

The first tax deadline of 2022 is already in sight! Keep reading to learn more about quarterly estimated tax payments, plus some useful tax tips.

What are Quarterly Estimated Tax Payments?

As you may already know, income tax is paid throughout the year. This happens in two ways. Most people have this tax withhold from their paychecks, Social Security benefits, or unemployment compensation.

However, people like self-employed individuals and investors often pay their taxes by making quarterly estimated tax payments. The deadline for making payments for the fourth quarter of 2021 is Tuesday, January 18, 2022.

Paying your taxes on time is important because it allows you to avoid penalties and interests. If you failed to make other quarterly payments earlier in the year, take action now. This way you’ll avoid paying an even larger penalty.

Some Things to Keep in Mind

Remember that all income is taxable. This includes investment income (even virtual currencies!) and income from the gig economy (for example, Uber drivers).

You should also keep in mind that, while this wasn’t the case in 2020 (as an exception due to the coronavirus pandemic), in 2021, unemployment compensation is fully taxable.

If you have questions about estimated tax payments, or if you need to make one, contact the experts at JT Taxes. We’ll be happy to help you determine whether you need to make a payment. If you do, we’ll guide you through the process using our friendly and easy-to-understand approach.

Finally, remember that filing season is approaching: Tax Day in 2022 is April 18. Regardless of how you pay your taxes, our experts stand ready to answer all your questions and help you file your taxes easily and without stress.