Tax Chat Newsletter

IRS Offers Penalty Relief to late filers, refunding $1.2 Billion

Join Us On Our Journey

Welcome to the GarciaTax Newsletter. I haven't yet developed a catchy name for the newsletter, but I wanted to get this to your inbox immediately. There's a lot happening behind the scenes at the IRS office ever since they received billions to upgrade its operation. This newsletter is a way to keep you updated on what's going on.

Not only will you be abreast of the current tax law πŸ₯± but how it relates and how to take advantage of any tax loopholes and strategies πŸ”₯.

. Enjoy :)

Gama Garcia

Important Deadlines

πŸ“… August 31 - Last day to get your Scorp documents to us

πŸ“… September 15 - S-Corp and Partnership Extension Deadline

πŸ“… September 30 - Last day to get your personal documents to us

πŸ“… October 18 - Individual and Corporation Extension Deadline

Let's Get Social

IRS Offers Penalty Relief to late filers, refunding $1.2 Billion

The Internal Revenue Service is providing penalty relief to most individual and business taxpayers who filed their 2019 or 2020 returns late due to the COVID pandemic while refunding $1.2 billion in penalties to nearly 1.6 million taxpayers who filed late.

The relief applies to the penalty imposed for failing to file, which is usually assessed at a rate of 5% per month and up to 25% of the unpaid tax when a federal income tax return is filed late. This relief applies to forms in both the Form 1040 and 1120 series.

To qualify for the relief, any eligible income tax return must be filed on or before Sept. 30, 2022.

If you already filed your 2019 and 2020 taxes and were filed late, expect a refund from the IRS on the late penalties that were paid.

Around the Web

Here is a simple solution for tracking receipts.

Biz Tax Tip

10 Tax Strategies for Self Employed

This week I have included ten tax strategies that put money in your pocket. 1.

  1. Deduct your health insurance premiums as a business deduction

  2. Employ your under-age-18 child to make taxable income disappear

  3. Employ your spouse without paying him or her a W-2 wage

  4. Rent your office, even your home office, from your spouse to save on self-employment taxes

  5. Establish that an office in your home is your principal office, to increase your vehicle deductions and also turn personal home expenses into business expenses

  6. Give yourself flowers, fruit, and books as tax-deductible fringe benefits

  7. Combine the home office and heavy SUV, crossover vehicle, or pickup truck to grab big deductions

  8. Design a business trip that includes some personal days - days you treat as 100 percent business even though you won't work on those days

  9. Use the seven-day tax deduction travel rule to create a business trip that is 87 percent personal vacation

  10. Deduct your smartphone and provide smartphones to your employees as tax-free fringe benefits

There you have them the 10 tax strategies that will put more money in your pocket.

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