Blog - Page 10 of 24 - JT Tax Services

Are You a Business Owner? Don’t Forget to Correctly Classify Your Workers

September 15, 2021

If you are a business owner, it’s very important that you learn to tell the difference between an employee and an independent contractor. This will help you avoid problems and ensure that your accounting is clear and precise. Keep reading to learn more about this important topic.

Employees or Independent Contractors?

When it comes to classifying your workers for tax purposes, there are two basic options: employees and independent contractors.

To determine whether a worker is an employee or a contractor, you should consider three main factors:

Does the business control, or has the right to control, what the worker does and how they do it?
Does the company control the financial aspects of the worker’s job? (For example, how are they paid, or how are their expenses refunded)
Are there any written contracts or employee-type benefits such as pension plan and vacation pay?

If you answered these questions with“Yes,” then the worker is an employee. By contrast, if the answer is “No,” then the person is an independent contractor.

What Happens if You Misclassify a Worker?

Misclassifying workers adversely affects workers themselves in the first place. For example, if a worker is classified as an independent worker when they are really employees, this means that the employer isn’t retaining and paying income taxes, as well as Social Security and Medicare taxes.

Also, if a company misclassifies a worker without a reasonable basis, then it might be held liable for employment taxes for that worker.

If you have workers whom you are currently treating as contractors, but would like to reclassify as employees for future tax periods, then the Voluntary Classification Settlement Program (VCSP) may interest you.

If you want to learn more about this program or determine whether your company qualifies to participate in it, contact JT Tax Services for more details.

Contact the Experts at JT Tax Services

Do you need help figuring out how to classify your workers or with any other matter related to 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.

The Filing Extension Deadline Is Almost Here!

By: UNIKO Media Group

September 10, 2021

The filing extension deadline for most 2020 federal tax returns is fast approaching, so don’t let it sneak up on you! Here’s what you need to know.

Tax Filing Extension Deadline in 2021

The tax filing extension deadline for most 2020 tax returns is October 15, 2021.

Originally, taxpayers were supposed to file their taxes by May 17. However, those who weren’t able to file on time could request an extension that gives them more time to file.

Rember: an extension to file is not an extension to pay. If you didn’t pay your taxes by May 17 2021, you may face penalties and interests. Talk with a tax expert you trust if you need help understanding your situation.

Some Useful Information

If you are an extended filer, the most important concept you should keep in mind is the Mailbox Rule. According to this rule, your return must be postmarked and sent by October 15 in order to comply with the filing extension deadline.

As with any tax return, you can make things a lot easier by gathering your Forms W-2 s and all the documents you need to support the tax credits and deductions you want to claim.

While the filing extension deadline is just around the corner, you still have time to find a dependable tax professional to help you prepare your return. At JT Taxes we offer assistance in all matters related to taxes delivered with friendliness, efficiency, and professionalism.

Remember that this deadline refers to federal taxes. Filing dates for state taxes vary depending on the state, so check with your local tax agency to find out which deadlines you must adhere to when it comes to local taxes.

Finally, keep in mind that the tax filing extension deadline won’t be extended, so this is your last chance to file your taxes without facing interests and penalties.

Contact the Experts at JT Tax Services

Do you need help preparing your taxes? Did you receive a letter from the IRS? 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.

4 Tax Tips for Labor Day Weekend

By: UNIKO Media Group

September 1, 2021

With Labor Day weekend just around the corner, this is the perfect time to put your taxes in order. Today we show you four simple things you can do over the long weekend to save time and money down the line.

4 Tax Tips for Labor Day Weekend

As the old saying goes, forewarned is forearmed. This long weekend, find the time to put into practice these four simple tips that will help you avoid a lot of headaches.

Take a Look at Your Tax Records

This is a good time to take a look at your tax records. If you don’t have one, then take advantage of the long weekend to create one.

Remember that, as a general rule, the IRS recommends keeping tax records for three years after filing the corresponding tax return. Once your tax records are complete, make sure to keep the documents in a safe place.

Make Copies of Important Documents

Another way you can take advantage o the long weekend is by making copies of any important tax document. The documents you may want to photocopy include tax returns, letters from the IRS, and any document related to your wages/salary, among others.

As with your tax records, you should store these copies in a dry, safe place.

Check Your Withholding

Simply put, checking your withholding means making sure that your employee is retaining the right amount of tax from your paycheck.

This is an easy way to ward off surprises, because if your employer is withholding less money than they are supposed to, you may have a big tax bill next year, or you may even have to pay a penalty.

Luckily, you can check your withholdings without even leaving your home. Just open the official Tax Withholding Estimator, and follow the instructions as they appear on your screen.

Contact a Tax Pro

From IRS debts to relief measures related to the coronavirus pandemic, most people have questions about taxes, but they feel they never have the time to contact a tax professional and get answers.

If that’s your case too, the long weekend is the perfect time to finally pick up the phone or send that email and contact a tax expert who can give you the assistance you need.

Contact the Experts at JT Tax Services

Scammers are always on the lookout for new victims. Luckily, when it comes to tax scams, there’s a simple step that will help you avoid most of them. Keep reading to learn more.

The Simple Step That Will Help You Avoid Most Tax Scams

By: UNIKO Media Group

August 25, 2021

Scammers are always on the lookout for new victims. Luckily, when it comes to tax scams, there’s a simple step that will help you avoid most of them. Keep reading to learn more.

How to Avoid Most Tax Scams

As the old saying goes, knowledge is power. So it’s no coincidence that knowledge is the best way to prevent falling prey to a tax scam.

Knowing how the IRS interacts with taxpayers will help you notice more easily the odd behaviors that are the hallmark of scammers. Remember:

The IRS doesn’t normally initiate contact with taxpayers by email. Don’t reply to emails from people claiming to represent the IRS. And remember oficial IRS email addresses end with “irs.gov”
The IRS will never get in touch with you by text message or social media. If you receive this tye of message, don’t respond; someone is trying to scam you.
Private debt collectos may contact taxpayers for the collection of certain tax liablities, but only after the taxpayer has received a written notice.
IRS officers and agents may visit the home or place of business to discuss tax liabilities or delinquent tax returns. However, remember that payments will never be requested to a source other that the Treasury Department.
If you are visited by an IRS representative, don’t forget to ask for credentials. IRS officers and agents can provide two types of credentials: a pocket commission and a Personal Identity Verification Credential.

Knowing this information will help you avoid most tax scams. In case you have further questions, or need assistance navigating any process related to tax collection or tax liabilities, don’t hesitate to contact a tax expert for more information.

Contact the Experts at JT Tax Services

Scammers Are Targeting Immigrants: Here’s How to Protect Yourself and Others

By: UNIKO Media Group

August 6, 2021

Scammers are always looking for ways to take advantage of vulnerable people, including senior citizens and immigrants. Keep reading to learn how to protect yourself or other people you know from this malicious strategy.

What You Need to Know

The IRS has warned that scammers have chosen immigrants as some of their favorite victims.

According to the agency, this type of scam usually occurs with a phone call from the criminals. In these calls, scammers threaten immigrants with deportation, revocation of their driver’s license, or jail if they don’t pay a bogus tax bill.

Ignore these intimidation tactics. Don’t engage the scammers in any way, as they may try to get you to reveal personal information. Remember that the IRS will never make threats over the phone or request that a specific payment method (such as gift cards) be used to pay your taxes.

It’s worth remembering that in most occasions, when the IRS wants to contact you, they will do it by mail and not by phone.

How to Protect Yourself and Others

It bears repeating: the IRS will never make threats in their communications with you. By keeping in mind this simple rule, you will be able to prevent scammers from intimidating you and parting you with your money.

Another way to protect you is to take advantage of the multilingual resources that the IRS keeps constantly updated. The agency offers content in many languages other than English, including Spanish, Chinese simplified and traditional, Vietnamese, Korean, and Russian.

If you know someone who might be a potential victim of scammers, don’t hesitate to share this information with them. You could sabe them money and many future headaches.

Additionally, you can always turn to a tax profesional you trust when you have questions. The tax experts at JT Taxes stand ready to offer the knowledgeable assistance you need to file and pay your taxes with confidence.

Contact the Experts at JT Tax Services

Do you need help preparing your taxes? Do you have questions about the Child Tax Credit? At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

Child Tax Credit Payments: What You Need to Know

By: UNIKO Media Group

July 21, 2021

Last week, American families began receiving the Child Tax Credit Payments. Have you received yours? Are you familiar with the tools you can use to manage your payments? Keep reading to learn more.

Child Tax Credit Payments: What You Need to Know

The Child Tax Credit Payments are part of the American Rescue Plan, a package of measures geared toward providing financial relief to American families affected by the coronavirus pandemic.

These are monthly payments of $250 or $300 for per qualifying child since July 15 through December 2021.

The dates of the payments are July 15, August 13, September 15, October 15, November 15 and December 15.

Working families will receive these payments if they make up to $150,00 for a couple or $112,500 for families with a single family.

Some Useful Tools

The IRS has created some useful tools to help people get more information about the Child Tax Credit Payments.

For example, if you are not sure whether you qualify for the payments, you can use this online assistant to determine if your family qualifies. All you have to do is to answer the questions that the assistant will show you automatically.

On the other hand, if you need to update your deposit information, or unenroll to stop getting the payments, then use the Child Tax Credit Update Portal.

Taxpayers who qualify for the payments but weren’t required to file a 2020 tax return should use the Child Tax Credit Non-Filer Sign-up Tool to report their qualifying children born before 2021.

If you have questions even after using these tools, don’t hesitate to contact our experts. We’ll be happy to answer your questions about this and any other topic related to taxes.

Contact the Experts at JT Tax Services

Have You Checked Your Tax Withholdings? This Is the Right Time to Do It

By: UNIKO Media Group

July 14, 2021

If your employer doesn’t withhold the right amount of tax from your paycheck, you may have unpleasant surprises when you file your tax return. Luckily, this situation can be easily avoided using a simple online tool.

How to Check Your Tax Withholding

Tax withholding is the amount of money your employer withholds from your paycheck and sends to the IRS on your behalf.

Checking your withholdings is important because it helps you make sure that the right amount of money is being withheld from your paycheck.

It’s particularly important to check your withholdings if you experienced an important life change that may affect your taxes, like having or adopting a child or buying a house.

To check your withholdings, all you have to do is use the online tool called Tax Withholding Estimator and follow the instructions below.

How to Use the Tax Withholding Estimator

To access the Tax Withholding Estimator, just click or tap on this link. Before you begin checking your withholdings, make sure to have the following on hand

The most recent pay statements for yourself, and if you are married, for your spouse too.
Gather information for other sources of income you may have.
Your most recent income tax return.

Once you have all this information, click or tap on the button “Use the Tax Withholding Estimator.”

Answer the various questions the system will ask you. If you have questions about specific words, click on the question marks that appear near some technical terms to read an explanation in plain English.

The process is safe and totally automated. The Estimator won’t ask you to provide any personal information such as Social Security number, address, or phone number.

The Tax Withholding Estimator provides information useful to most taxpayers. If you need help checking your withholdings or if your tax situation is particularly complex, don’t hesitate to contact our experts today.

Contact the Experts at JT Tax Services

Do you need help preparing your taxes? At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

Remember: You Must Also Pay Taxes on Income From Hobby Activities

By: UNIKO Media Group

July 7, 2021

Whether it’s knitting, fishing, or reading books, we all need a hobby. However, if your hobby activity is a source of income, then you should make sure to report it on your tax return.

Paying Taxes on Income From Hobby Activities

Let’s begin with some basic definitions. A hobby is an activity you pursue for pure enjoyment, without intentions of making a profit.

While this seems like a clear-cut definition, things are not always so simple. For example, it happens often that people begin selling the products of their hobby. Do they have to report that income on their tax return?

The answer is yes. If you receive income from an activity you carry out with no intention of making a profit, then you should report it on your tax return, specifically on Schedule 1, Form 1040.

On the other hand, any income from for-profit activities should be reported on Schedule C.

When determining whether an activity is a hobby or a for-profit business, the following factors are taken into account:

Whether you carry out that activity like a business, and maintain complete and accurate books and records.
Whether the time and effort you put into the activity shows you intend to make it profitable.
Whether you depend on income from the activity for your livelihood.
Whether any losses are due to circumstances beyond your control or are normal for the startup phase of their type of business.
Whether you change the way you carry out that activity to improve profitability.
Whether you have the knowledge needed to carry out the activity as a successful business.
Whether you were successful in making a profit in similar activities in the past.
Whether the activity makes a profit in some years and how much profit it makes.
Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

If you find it difficult to figure out whether an activity is a hobby or a business, don’t hesitate to contact a tax professional. They will help you figure out the tax strategy that better fits your unique situation.

Contact the Experts at JT Tax Services

Do you need help preparing your taxes? At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

Beware of Charity Scams

By: UNIKO Media Group

July 1, 2021

Scammers have no qualms about taking advantage of your willingness to help, that’s why you should keep an eye out for charity scams. Here’s what you need to know.

How do Charity Scams Work?

A charity scam is the act of asking for money to supposedly help a noble cause, although actually the money ends up lining the pockets of criminals.

Any natural disaster or catastrophic event that makes the news creates the perfect conditions for fake charity scams.

Needless to say, criminals were quick to take advantage of the concern caused by the coronavirus pandemic, sparking an uptick in scam attempts that has become a major concern for authorities.

How to Avoid Charity Scams

Luckily, avoiding charity scams is easy if you know how to identify legitimate charities.

If you are interested in claiming a tax deduction after donating money or goods, the IRS online tool Tax Exempt Organization Search will help you determine whether the institution you have in mind is a qualified charity.

Here are other guidelines to help you ward off charity scams:

Don’t let anyone pressure you into donating. This is a red flag that should put you on alert. If the other person wants you to donate as soon as possible, chances are that they want to prevent you from doing a thorough research.
Before donating ask for the exact name, web address, and mailing address so that you can confirm all this information yourself. Keep in mind that scammers will try to confuse you by using names that are similar to those of reputable charities.
Never donate to a charity by buying gift cards or wiring money. This is a well-known scam and no legitimate organization raises funds this way. The safest for you is to make your donations by credit card or check after doing all the necessary research.

Contact the Experts at JT Tax Services

Do you need help preparing your taxes? Do you want to learn more about refunds and credits? At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

A Simple Tip to Make Tax Filing a Lot Easier

By: UNIKO Media Group

June 22, 2021

Filing your taxes takes focus and great attention to detail. And while this may sound complex, it can be really easy if you follow a simple tip. Keep reading to learn more.

How to Make Tax Filing a Lot Easier

Filing your tax return becomes a breeze when you keep records of all your tax documents.

Efficient recordkeeping helps you identify sources of income, keep track of your expenses and support the information of your tax return. All in all, keeping comprehensive records makes tax filing an easier, simpler, and more precise task.

The Documents You Should Make Sure to Keep

Below is a list of the documents you should make sure to keep.

Tax-related documents. This includes wage and earning statements, dividend statements, bank interests, and some government payments, such as unemployment compensation, or virtual currency transactions. You should also keep any receipts, canceled checks, and other documents that help support income, a deduction, or a credit reported on your tax return
Letters from the IRS and prior year tax returns. Make sure to keep copies of prior year tax returns, as well as any letter from the IRS. This includes adjustment notices and Economic Impact Payment Notices, among others.
Property records. Pay attention to keep all records relating to any property your dispose of or sell.
Businesses income and expenses. Taxpayers who own a business must come up with a recordkeeping method that reflects accurately their gross income and expenses. If you have employees, don’t forget that you must keep all employment tax records for at least four years.
Health insurance. Keep records of all the documents related to health insurance for you or your family. You will need that information if you want to claim the premium tax credit.