Public Law 117-58 the Infrastructure Investment and Jobs Act, could end up costing crypto investors by increasing required annual reporting from digital currency brokers starting in January 2023. A lot of crypto investors have no idea what’s coming and many still believe, incorrectly, that trading one crypto or digital asset for another is not a taxable even. This is just not true according to Enrolled Agent Steven J Weil, President of RMS Accounting.
The IRS requires investors to disclose yearly cryptocurrency activity by checking a box on their tax returns. Many filers don’t know which transactions to report.
While buying digital currency won’t prompt a tax bill, converting it to cash, trading for another coin, or using it for purchases may trigger levies.
Many crypto investors don’t understand the complex tax ramifications of cryptocurrency and often don’t have the records needed to support the taxability of their trades or exchanges. Taxable income results from the difference between the asset’s original purchase price, known as cost basis, and the value upon sale or exchange, and this can be tricky when instead of cash one crypto currency is traded for another.
The infrastructure bill will require crypto exchanges to send Form 1099-B, a federal tax document used by traditional brokerages, to report an asset’s yearly profit or loss. This will make it simpler for both the IRS and investors to track profits and losses. It will also give the IRS the tools to go after what it believes has been substantially underreported income.
It’s important to remember even without a 1099-B, investors are responsible for reporting and paying their crypto tax liability, and 2023 reporting could also give the IRS tools to use in auditing 2021 and 2022 returns from un or under reported crypto income.
Order Confirmation Imitation
If you’ve started your holiday shopping, you may have received purchase confirmation emails from Amazon, one of the world’s most popular retailers. Unfortunately, cybercriminals have also been sending their own version of these emails. In a new scam, cybercriminals impersonate Amazon to send fake purchase confirmation emails in hopes of receiving a special holiday gift: your credit card information.
In this scam, cybercriminals send you a fake purchase confirmation email that appears to come from Amazon. In the email, you can review details about the phony purchase, such as the payment amount and your mailing address. To review the purchase further, you can click a “View or manage order” button in the email. If you click this button, you’ll be taken to Amazon’s real website, but you won’t be able to find information about the purchase. As a last resort, you can call the customer service phone number in the email. If you call, you’ll be asked to provide your credit card number and CVV number to cancel the purchase. Instead of canceling the purchase, you’ll grant cybercriminals access to your credit card.
Don’t fall for this scam! Follow the tips below to stay safe:
- Watch out for fake customer service phone numbers. If you need assistance, check the vendor’s website to find their customer service phone number or email address.
- Don’t click links in emails you weren’t expecting. If you click a malicious link, malware or other malicious software may be downloaded onto your device.
Don’t share sensitive information, such as credit card numbers or social security numbers, over the phone.
We received this article from The KnowBe4 Security Team KnowBe4.com
Pretending to be an IRS agent is one of the favorite tactics of scam artists according to the Better Business Bureau. The con artists impersonate the IRS, to either intimidate people into making payments over the phone or to send misleading emails tricking people into sharing personal information digitally.
You can defend yourself against these scammers by knowing these simple rules:
Tip 1: Expect A Letter First
In almost every case, the IRS will send you a letter via standard mail if they need to get in touch with you. This will alert you to expect future communication from the agency and instruct you on the best ways to get in touch with them.
What to do: If you get a letter from the IRS that is unexpected or suspicious, it should have a form or notice number searchable on the IRS website, www.irs.gov. If something doesn’t look right, you can call the IRS help desk at 1-800-829-1040 to question it, or call your tax professional.
Tip 2: Never Communicate Via Email
The IRS will never initiate contact with you using email. A common scammer trick is to send emails to taxpayers using accounts and graphics that imitate the agency’s logo. These emails may threaten imprisonment or fines if you don’t pay up, or promise an extra refund if you send money to “prepay” your taxes. Often the emails contain links to an official-looking fake website to collect payments. Clicking on them may also trigger the installation of virus programs on your computer.
What to do: Don’t respond to any email communications supposedly from the IRS. Don’t click on any links. Delete the email or forward it to email@example.com to help catch the scammers.
Tip 3: Proper Phone Call Etiquette
After notification via the USPS, the real IRS may call to discuss options for handling delinquent taxes or an audit. A real IRS agent, or a debt collector, won’t demand immediate payment without giving you an opportunity to question or appeal the bill. Nor will they threaten lawsuits, arrest or deportation. Their tone should not be hostile or insulting. Finally, if they ask for payment, they should be asking you to make payments only to the United States Treasury.
What to do: If you get a call from the IRS or an IRS debt collector, politely ask for the employee’s name, badge number and phone number. They shouldn’t hesitate to provide this information. You should then end the call and dial the IRS at 1-800-366-4484 to confirm the person’s identity.
Tip 4: Check In-Person Visits
Ask the person for their credentials. Every IRS agent is able to produce two forms of credentials: a pocket commission card and a personal identity verification card issued by the Department of Homeland Security, also called an HSPD-12.
What to do: Never provide sensitive information nor confirm information they may have without first independently verifying they are legitimate representatives of the IRS. If you have concerns, call the IRS at 1-800-366-4484 to confirm the person’s identity. https://www.irs.gov/newsroom/common-tax-scams-and-tips-to-help-taxpayers-avoid-them?fbclid=IwAR39fbxAvKUMmnD3LvUpakAIx-fnHEoQfeh-3WDZa_ARt4SSpMo40usQP9I
November 1, 2021
For the first time in 40 years, taxes on income and wealth transfers may be headed higher, making tax planning more important than ever.
As a client of RMS Accounting, we are pleased to offer you a FREE year-end tax planning appointment. That’s right — as long as we prepared your 2020 tax return, your tax planning appointment is FREE. This year’s appointments are available in person. Our entire team is vaccinated, so it’s safe for you to visit us! You can also make a phone or Zoom appointment. No masks are required as long as you are comfortable being without a mask. We are working hard to get things back to normal and one of the things we missed most last tax season was getting to visit with old friends.
2021 has turned out to be quite a year. Between Covid-19, variants, a new president and congress, along with lots of proposed tax legislation, none of which are sure to become law. There is a lot to consider in planning for an uncertain future. As we get closer to year end, we hope to know more and have real answers to what the tax laws will look like for the coming year.
Many businesses and individuals have suffered a decline in income during 2021 and this can create unique planning opportunities. Some of you, those with qualifying children may also have been receiving advance payments of the newly increased child tax credit. What you may not know is the money received as advanced child tax credit payments will reduce your tax refund – It might even mean you owe taxes when it comes time to file your return.
One thing you can be sure of is that our tax professionals are following the latest developments in Washington and will be up to date and ready, if and when tax changes are made.
While many things have changed in the world, one thing we can assure you has not changed is our dedication to you, our valued clients.
As the end of the year approaches, it is a good time for you to start thinking about the tax planning moves you can make. What those moves are will depend a lot on how 2021 has played out for you. If you suffered a drop in income due to Covid-19, or for any other reason, it might make sense to delay deductions and accelerate income. If your income has stayed the same or increased what you do will depend on how much of what is currently proposed you believe will become law. For high income taxpayers, it sounds a lot like tax rates will be going up. Who will be considered high income and how much, if at all, taxes will increase is unknown as we write this letter. If you believe that higher tax rates are around the corner, than that needs to be factored into your plans.
Businesses that received Employee Retention Credits will find that they don’t get to deduct the payroll expenses these credits offset. This could result in increased taxable income. On the bright side PPP loans forgiven do not reduce the deductions from expenses they paid and do not create taxable income. There were many other government funded plans and each of these can affect your taxable income differently.
If we did not prepare your 2020 return, but you, or someone you refer to us, mentions this letter, we will take $150.00 off our normal fee of $300.00 and charge you and/or your friends only $150.00. You can be sure that planning will save you many times this small amount.
Remember, the time to act is now — before the clock strikes midnight on December 31. Time is limited, and our appointment calendar fills up fast, so be sure to make your appointment early. This will ensure that you will get an appointment that works with your schedule and still have plenty of time to put your tax plan into action.
Need some help getting ready for for your tax planning meeting? We have developed the 2021 YEAR END TAX PLANNING GUIDE, to help you uncover tax planning opportunities to download a copy of this important guide just click here.
We look forward to seeing you soon.
Steven J Weil, Ph.D., EA Theresa J Weil, Ph.D., EA Lisa Shmaruk, EA
Do you know what the minimum wage is for your state? Federal minimum wage requirements are enforced by the department of labor, but there often state requirements as well and who enforces these depends on the state your employees are located in.
Raises the minimum wage to $10.00 per hour effective September 30th, 2021 and then increases it annually by $1.00 per hour until the minimum wage reaches $15.00 per hour in 2026 and then reverts to being adjusted annually for inflation.
Here’s what the minimum wage increase would look like each year:
- $10.00 on September 30, 2021
- $11.00 on September 30, 2022
- $12.00 on September 30, 2023
- $13.00 on September 30, 2024
- $14.00 on September 30, 2025
- $15.00 on September 30, 2026
Beginning on Sept. 30, 2027, the state’s plan is to have an annual adjustment to the state minimum wage based on increases to the Consumer Price Index for Urban Wage Earners and Clerical Workers.
A whole new world has opened to me and I don’t like it one bit. As I recently turned 65, the nature of my mail, Facebook feed and email have changed. I have suddenly become the target of every financial planner, investment product, tax savings event, webinar and free meal on the planet.
All of these promotions want to help me solve my retirement issues, not that I had any to begin with but then again, I am just not ready to retire. They know the secret to not paying taxes on my IRAs and retirement plans, so I can live the good life, as long as I have at least $500,000 they can help me.
All this new information got me to thinking; as a tax guy that is a bit of a nerd and spends way too much time studying the tax code, tax strategies, retirement planning and wealth building, what could they possibly know that I missed? So lately I have been spending a lot of time at Webinars, Free Meals and speaking with many of these people whose sole goal in life is to help me. Here’s what I found, so that you won’t have to waste your time.
What I have found is that they do not have a magic way to make my retirement (if I ever do retire) worry free. When they say they can show me how to take money out of my IRA or pension tax free, what they really mean is that I can pay the tax using money I borrow from an insurance company. I “should” move my money, what I need to pay the tax, and that I will then owe the insurance company who will take payment from the death benefit — unless I choose to liquidate the policy, at which time I will have to pay back the insurance company with interest for borrowing my own money. These salespeople are long on ideas but short on details, in most cases, until I commit my money.
In the end most are nothing more than sales people looking to close a deal. Yes, they do care about retirement, but not my retirement. What they care about is theirs. Over the years I have had many clients come to me with asset protection plans that while they may have made it harder for others to sue and take their assets, required thousands of dollars in accounting and tax services, complicated accounting and money be set aside for legal defense should something happen, and they need this heavy-duty protection. In almost every case the cost outweighed the benefit.
This is not to say that you can’t do anything about the amount of taxes you pay in retirement. But this is the kind of planning that well informed tax pros have been using for years. This includes timing IRA and pension distributions into low tax rate years, planning for capital gains and capital losses, using tax favored investments, like municipal bonds, where appropriate and even the appropriate use of annuities when deferral and asset protection is required.
We are hearing a lot about tax changes from the White House and Congress. The proposals include tax increases for families with income over $400,000 (but what will really happen in the end no one knows). Be careful about making moves based on tax changes that are not yet known. Make sure you have the facts and you understand the consequences of any actions you take as well as how those advising you are compensated for what they are advising you.
In the over 30 years we have been helping clients, tax rates have gone up and down, and the tax laws have changed many time, but no matter what the changes we have been able to assist clients in charting a course that makes sense and helps them to do better.
Rounding to Replace ‘Bracket System’ in Calculation of Florida Sales and Use Taxes
As a result of recent legislation, the “bracket system” for calculating sales tax and discretionary sales surtax in the State of Florida is replaced by a rounding algorithm. Effective July 1, 2021, businesses collecting and remitting sales tax and discretionary sales surtax must use a rounding algorithm that: 1) carries the tax computation to the third decimal place; and 2) always rounds up to the next whole cent when the third decimal place is greater than 4. For more information, read Tax Information Publication (TIP) 21A01-02.
So much for the old saying “spending like a drunken sailor”, Want to drive out of control spending today all you have to say is “Spending like the U.S. Congress. Today 08/15/2021 — The Congressional Budget Office has reported that the estimated federal budget deficit for fiscal year 2021 is now $2.5 trillion. If current laws remain unchanged, the budget deficit will reach $3 trillion by the end of September, CBO said.
The IRS has updated Frequently Asked Questions (FAQs) on the paid sick and family leave tax credits under the American Rescue Plan Act of 2021 (ARPA). The updates clarify that eligible employers can claim the credits for providing leave to employees to accompany a family or household member or certain other individuals to obtain immunization relating to COVID-19 or to care for a family or household member recovering from a COVID-19 immunization. The paid sick and family leave credits reimburse employers for the cost of providing paid sick and family leave for reasons related to COVID-19 and applies for comparable credits for self-employed individuals. The ARPA has extended these credits to leave taken beginning 4/1/21 through 9/30/21. For more information, see www.irs.gov/newsroom/tax-credits-for-paid-leave-under-the-american-rescue-plan-act-of-2021-determining-the-amount-of-the-tax-credit-for-qualified-family-leave-wages .