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Photo of student with earphones and smartphone illustrates blog: "What You Need to Know About Education Tax Credits"

What You Need to Know About Education Tax Credits

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

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.

Photo of confident businessman illustrates blog: "Remember: Make Your Tax Payment for Q4 of 2021 by January 18!"

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

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. 

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.

When Is Tax Day 2022?

When Is Tax Day in 2022?

New Year’s is almost here! But before you turn the page on 2021, make sure to mark this important tax date on your calendar for 2022.

When Is Tax Day in 2022?

Tax Day is the deadline to submit your federal tax return. This day is usually April 15 or the Monday after if the 15 falls on Saturday, Sunday, or a Festivity. 

The Federal Tax Day next year will be April 18, 2022, because April 15 is Emancipation Day, a regional government holiday observed in Washington D.C.

In 2020 and 2021, Tax Day was moved due to the COVID-19 pandemic. The IRS deemed it necessary to give taxpayers more time to file their taxes given the disruptions caused by the COVID-19 pandemic. 

However, there are no official plans to push Tax Day to a different date in 2022, so it’s a good idea to begin gathering any supporting documents you may need and contact a tax expert if you have any questions. 

When Is the First Day to File Your Taxes?

Each year, during the first days of January, the IRS issues a statement announcing the first day to file taxes. Stay tuned to learn when you can begin filing, as well as other useful tips from our experts. 

Once you are ready to file, you can do it either by mail or using electronic filing (or e-file). E-file is usually the most convenient option, as it helps you get your tax refund faster. 

Finally, keep in mind that this information (including the April 18 deadline) applies only to federal taxes — the dates and processes for state taxes may be different. Contact your local tax agency or a tax expert you trust to ensure you file and pay all your taxes on time. 

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.

Photo of couple reading a letter.

Keep This in Mind if You Received the Third Round of Stimulus Payments or Advance Child Tax Credit Payments

If you received the third round of stimulus payments or advance child tax credit payments, you should keep an eye out for a letter from the IRS you should receive soon. Keep reading to learn more. 

What You Need to Know 

Stimulus payments and advance child tax credit payments were two measures designed to offer financial help to Americans affected by the COVID-19 pandemic.

American citizens and U.S. resident aliens received payments of $1,200 if they met the following conditions:

  • They were not claimed as dependents of another taxpayer.
  • They have a Social Security number valid for employment.
  • Their adjusted gross income did not exceed the following thresholds: $150,000 if married filing a joint return, 112,500 if filing as head of household, $75,000 for eligible individuals with any other filing status.

Advance child tax credit payments, on the other hand, were monthly payments parents received starting July 15 through December 15, 2021. Parents were issued monthly payments of $250 or $300 per child, depending on the age of the children. 

Now, if you received any of these payments, you will soon get a letter from the IRS outlining details you’ll need to file your tax return more easily next year. 

The IRS said on Thursday that it will begin issuing letters in December for taxpayers who received advance child tax credit payments.

The letters for people who received the third round of economic impact payments will go out at the end of January.

When you receive these letters, make sure to hold on to them and place them in a safe place with any other supporting documents you may need to file your return. Remember: keeping good records takes a lot of the stress out of tax filing!

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.

Make Sure Not to Fall for These Christmas Scams

Make Sure Not to Fall for These Christmas Scams

While Christmas is a magical season, it also creates the perfect conditions for scammers looking to take advantage of unsuspecting victims. From fake apps to package delivery scams, here’s what you need to know about Christmas scams.

Fake Apps

Cybercriminals go to great lengths in order to fool unsuspecting victims. This includes creating fake apps that look legitimate but are built with one purpose in mind: to steal your personal and financial information. To avoid this scam, download any shopping app directly from the website of the retailer. This way you can make sure that you are using a legitimate app.

Fake Charities

Criminals know that during Christmas people are more inclined to make donations and use this fact to their advantage. As you may imagine, in a charity scam, fraudsters impersonate a legitimate institution in order to get you to give them money.

Some ways to avoid this scheme include researching a charity before donating, and remembering that you should never donate to a charity by wiring money or by gift card. Some red flags, like a person trying to pressure you into donating, should put you instantly on high alert.

Non-Delivery and Non-Payment Scams

According to the FBI, these are the two most common holiday scams. A non-delivery scam occurs when you purchase products online that are never delivered. In non-payment scams, on the other hand, products are shipped or services are rendered but the provider is never paid.

To avoid these scams, use only reputable websites. Remember that criminals are very skilled at creating fake websites that look legitimate. To spot potentially dangerous websites, pay attention to details, such as typos, excessive use of exclamation or interrogation marks, and addresses that intend to emulate the name of an established institution (for example, “isr” instead of “irs”).

Package Delivery Scams

With a non-delivery scam, you never received a package you already paid for. In many ways, package delivery scams are the opposite. 

In this type of scam, criminals warn you through a missed delivery tag, email, or text message, about a package they were supposedly unable to deliver. These messages usually include a telephone number you are urged to call or a link you are supposed to click on. Refrain from following these instructions: the links may direct you to a website built to steal your information (phishing), while the person answering the phone is a scammer eager to ask for your credit card details.

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.

Photo of smiling family illustrates blog: "Advance Child Tax Credit Payments and your 2022 Tax Return"

Advance Child Tax Credit Payments and your 2022 Tax Return

The Advance Child Tax Credit Payments were one of the most important tax provisions of 2021. These payments helped millions of families weather the economic impact of the COVID-19 pandemic. But what does it all mean for your 2022 tax return? Keep reading to learn more.

Advance Child Tax Credit Payments and your 2022 Tax Return

In short, the Advance Child Tax Credit Payments were monthly payments that American families received throughout 2021 (the last payment is scheduled to go out on December 15, 2021) as a form of financial relief. 

Families received $300 per month for every child under the age of six and $250 per month for every child between the ages of six and 17. Now, what does this all mean for your 2022 tax return?

First, remember that these payments were technically a 50% cash advance on the child tax credit you were expected to qualify for on your 2022 return. This means that there are two basic scenarios:

  • You received less than the amount you were eligible for.
  • You received more that you were eligible for. 

If you received LESS money than you were supposed to, you will be able to claim a credit for the remaining amount on your 2022 tax return. 

On the other hand, if you received MORE than you were eligible for, you may need to repay a part of all the extra money when you file your taxes next year. 

In January 2022, the IRS will send you a letter that states the total amount of Advance Child Tax Credit Payments you received in 2021. Make sure to keep this letter, along with any other letter about your Child Tax Credit. 

If you need assistance with your Child Tax Credit or with your 2022 Tax return, get in touch with JT Taxes. Our team stands ready to answer your questions and offer the dependable, friendly assistance you need.

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.

3 Things You Should Do Before the Tax Year Ends

3 Things You Should Do Before the Tax Year Ends

Just like the calendar year, the tax year ends on December 31. Most people associate that date with parties and New Year’s resolutions. However, there are some other important things you should do by that date. 

Donate to Charity

Remember that now you can claim a deduction of up to $300 (or $600 for couples filing jointly) for cash contributions to qualifying charities during 2021. 

The term “cash” includes donations made by credit card, debit card, check, as well as unreimbursed out-of-pocket expenses in connection to volunteer services to a qualifying charity. 

If you are planning do donate, use the Tax Exempt Organization Search, a tool created by the IRS to allow taxpayers to check an organization’s federal tax status and filings 

Check Your ITIN 

The term ITIN stands for Individual Taxpayer Identification Number. You should renew your ITIN if it has expired and you’ll need it for a U.S. federal tax return. Keep the following in mind:

  • Any ITIN not used on a U.S. federal tax return at least once for years 201, 2019, and 2020 will expire on December 31, 2021.
  • ITINs with middle digits 70 through 88 have expired. 
  • ITINs with middle digits 90 through 99 have expired, if assigned before 2013.

Get Ready to File Your Return in 2022

This is the ideal time to get ready to file your return in 2022. Take a look at your tax records and make sure you have all the documents you need to support the deductions you intend to claim. Also, if you haven’t done it yet, you may consider choosing direct deposit to get your tax refund: it’s faster and eliminates the possibility that a refund check could be lost or stolen. 

If you have any questions or need assistance preparing your return, contact JT Tax Services today. We’ll be happy to answer any questions you may have.  

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.

Photo of couple in front of laptop illustrates blog: "How to Protect Yourself Against Holiday Scams"

How to Protect Yourself Against Holiday Scams

The holidays are here, and that means fun, delicious food, quality time with your family… and scam attempts. Here’s what you need to know to protect yourself. 

How to Protect Yourself Against Holiday Scams

According to the FBI, the two most common types of holiday scams are non-delivery and non-payment scams. A 2020 report shows that these two types of schemes cost people more than $265 million, with credit card fraud accounting for another $129 million.

The IRS, for his part, is sounding the alarm about fake charities. Criminals try to take advantage of the goodwill that the holiday season generates to steal funds and personal information. Regardless of the strategy, these easy tips will help you thwart scammers:

  • The most basic rules of cybersecurity also apply during the holidays. So don’t click on any links or download any attachments contained in suspicious emails. 
  • Consider it a huge red flag if a company sends an unrequested email asking you to change or verify your passport. Find the company’s official phone number and can call them to verify the email is legitimate.
  • Before making a purchase online, check the website URL (the website address) and make sure it includes the term “https.” If it doesn’t, don’t move forward with the transaction.
  • When shopping online, avoid using the public or unsecured WiFi available in places like malls or coffee shops. 
  • When it comes to donations, be wary of unrequested calls. Don’t let callers pressure you into making a donation (a huge red flag). Remember: no legitimate charity requests prepaid gift cards as donations.
  • NEVER wire money directly to a charity or online seller. 
  • When purchasing items online, always get a tracking number so you can monitor the shipping process

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.

christmas is the season of giving

What You Need to Know If You Are Making Donations This Christmas

As you know, Christmas is the season of giving. If you are planning to make donations to charities over the next few weeks, keep reading to learn about a special change that can help you claim a deduction for donations on your 2021 federal income tax return.  

An Exceptional Measure

The COVID-19 pandemic has wreaked havoc on the finances of a lot of people. As a response, the IRS has taken some extraordinary measures to offer relief to those who need it most. 

One of these measures is an exception that allows taxpayers to claim a limited deduction of up to $600 in donations to qualifying charities on their 2021 federal income tax return.

What You Need to Know

Usually, people who opt for the standard deduction cannot claim deductions for their charitable contributions.

However, a new temporary exception allows these taxpayers to claim a limited deduction on their 2021 tax return. 

This is important because, according to the IRS, nine out of 10 taxpayers choose the standard deduction, so a lot of people can benefit from this special rule.

The temporary exception allows individual taxpayers (including married taxpayers who file separately) to claim up to $300 for donations in cash made in 2021 to qualifying charities. The limit is increased to $600 for married taxpayers who file jointly.

Keep This In Mind

For the purposes of this rule, cash contributions include donations made by check, credit card, as well as amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with their volunteer services to a qualifying charitable organization. 

To verify the status of a charity, use the Tax Exempt Organization Tool on the IRS website. 

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.

Photo of mother and child illustrates blog "If your Income Changed in 2021, don’t forget to Update Your Child Credit Payments"

If your Income Changed in 2021, don’t forget to Update Your Child Tax Credit Payments

If for any reason your income was substantially higher or lower in 2021 than in 2020, don’t forget to update your Child Tax Credit Payments information so that your payments increase or decrease accordingly.   

How to Update Your Information

The Child Tax Credit Payments are monthly payments issued by the United States government to help working families with the impact of the COVID-19 pandemic.  

The first payments were delivered on July 15 of this year. Since then, millions of families have received these payments every month. 

The amount of the payments people receive is based on information from previous years. If your income increased or decreased substantially, it’s a good idea to update your information so that your payments are adjusted accordingly. 

To update your income information, just visit the Child Tax Credit Update Portal on the IRS official website and follow the instructions. 

Any change you make will be reflected on the payment that will go out on December 15, which is also the last payment scheduled for 2021. 

About the Child Tax Credit Payments

The Child Tax Credit Payments are a measure included in the American Rescue Plan. 

Since last July, families all over the United States have received up to $300 for every child who’s five or younger and up to $250 for every child ages 6 to 17.

The full amount of the payments is for families that:

  • Make up to $150,000 for couples.
  • Make up to $112,500 for families with one parent.  

After those limits, the amount of the payments begins to phase off gradually. 

If you haven’t enrolled yet to receive the Child Tax Credit Payments, you still have until November 15 to do it. Don’t miss this opportunity! 

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.