NRI Tax Group, 5201 Great America Parkway Ste # 350, Santa Clara, CA (2026)

03/06/2023

False Tax Returns Scams – Did You Know?

IRS and state tax officials recently issued warnings about misleading posts on social media encouraging people to file bogus returns. Typically, the scammers claim that by following their instructions, taxpayers can receive a large tax refund. These claims are false and dangerous.

Some scammers urge people to use tax software to fill out a Form W-2 (Wage and Tax Statement) with false information, such as fake employers or high amounts of tax withheld. A similar scam involves completing Schedule H (Household Employment Taxes) with made-up figures related to paying household employees. In both cases, the scammers state that people can get a tax refund by electronically filing these fraudulent forms.

Alternatively, a scammer may encourage taxpayers to file Form 7202 to get a tax credit for sick or family leave. This special credit was only available in 2020 and 2021, and only for self-employed individuals. Employees could never claim it, and no one may claim it for tax year 2022.

The IRS urges all taxpayers not to believe these scam posts and messages, and to only file tax forms with true and accurate information. Filing a bogus return could trigger IRS penalties including up to a $5,000 fine, and potentially criminal charges.

03/01/2023

Refund Amounts - Did You Know?

If your refund amount is different than stated on the filed tax return, part or all of your refund may have been used to pay off (offset) past-due federal tax, student loans, state income tax or other past-due debts.

You'll receive a notice from the IRS if such an offset occurs that will show the original tax refund amount, the offset amount, as well as the name, address and telephone number of the agency receiving the payment.

If you haven't received your refund yet, you may be able to check the status using the IRS' "Where's my Refund?" tool: https://www.irs.gov/refunds.

02/27/2023

Credit for Other Dependents – Did You Know?

If you have dependents who do not meet the age or other eligibility requirements for the Child Tax Credit (CTC), you may qualify for the Credit for Other Dependents. This credit may be claimed for dependents of any age, including children, parents and certain other relatives, along with some non-related dependents who live with you. Each dependent must be a U.S. citizen, national or permanent resident, and must have either a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).

The maximum credit amount is $500 per qualifying dependent for taxpayers with an adjusted gross income (AGI) of $400,000 or below for joint filers, or $200,000 or below for all others. The credit phases out at higher income levels.

If you qualify, you may claim the Credit for Other Dependents in addition to the Child and Dependent Care Credit and Earned Income Tax Credit (EITC). A tax professional can help you determine which credits for dependents you are eligible for, and how to best combine credits to reduce your tax or increase your refund.

02/23/2023

Earned Income Tax Credit – Did You Know?

Many Americans may qualify for the Earned Income Tax Credit (EITC), but do not claim it because they do not know it is available. The EITC is a fully refundable tax credit, which means that eligible filers can use it to get a tax refund even if they owe no tax.

To qualify for the credit, your 2022 income must include earned income, such as employee pay or earnings from self-employment activities like freelance or gig economy work. You also cannot have more than $10,300 in investment income, such as interest or dividends.

In addition, your adjusted gross income (AGI) for 2022 must be below the limit set by the IRS for your filing status and number of qualifying dependents. For married taxpayers who file joint returns, the 2022 AGI limit ranges from $22,610 (no dependents) to $59,187 (three or more qualifying dependents). For those who file under single, head of household or surviving spouse status, the AGI limit ranges from $16,480 (no dependents) to $53,057 (three or more qualifying dependents).

In order to claim the EITC, you must file a 2022 federal tax return, even if you would not ordinarily be required to file based on your income. A tax professional can help you file your return electronically, and set up direct deposit to get your refund as quickly as possible.

02/21/2023

Tips for Filing an Accurate 2022 Return (2/2)

Here are some additional key points to keep in mind as you prepare your 2022 tax returns. To avoid processing delays and potential IRS penalties, taxpayers must report all forms of potentially taxable income. In addition to wages or a salary that you receive as an employee, make sure to accurately report any income you had from:

- Business activities, including selling goods online, independent contract work, side gigs or other forms of self-employment
- Interest, dividends, gains from digital assets (cryptocurrency, non-fungible tokens, stablecoins) transactions or other investment returns
- Seasonal or other temporary or part-time work
- Prizes, awards, bonuses or gambling winnings

A tax professional can help you properly report all your income, and file your return electronically for faster processing.

02/15/2023

IRS Clarifies Which 2022 State Tax Payments Are Non-Taxable – Did You Know?

Many states issued special tax rebates or other relief payments in 2022 and until now, it has been unclear whether recipients of these payments had to report them as taxable income on their 2022 federal tax returns.

According to the IRS, certain payments issued by 17 state governments may qualify as disaster relief or general welfare payments, which taxpayers may exclude from their income. Therefore, those who received these special rebates or relief payments generally do not have to report the payments on their federal tax returns as taxable income. The 17 states are: Alaska, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. The IRS has published a list of the specific payments covered by this rule (link below).

Meanwhile, taxpayers in Georgia, Massachusetts, South Carolina and Virginia who received certain state tax payments in 2022 may be able to exclude these payments from their income if they were a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit.

A tax professional can help you determine whether any state tax payments you received in 2022 may be taxable, and if so, how to properly report them on your tax return.

List of State Tax Payments Covered: https://www.irs.gov/newsroom/state-payments.

02/13/2023

Tips for Filing an Accurate 2022 Return (1/2)

The first step toward completing an accurate return and claiming every deduction and credit that you are entitled to is assembling critical records and documents. These include:

- Earnings statements like W-2s, 1099s and/or 1098s
- Social Security or other taxpayer ID numbers for all people listed on your return
- Any IRS letters you received in 2022 about deduction or credit amounts, adjustments made to your past tax returns, etc.
- Form 1095-A (Health Insurance Marketplace Statement), if you claim the Affordable Care Act Premium Tax Credit
- Form 1098-T (Tuition Statement), if you claim education expense credits or deductions

In addition, having your bank account and routing numbers handy will enable you to request your refund by direct deposit. A tax professional can help you file your return electronically and set up direct deposit for the fastest possible processing.

02/08/2023

Missing or Incorrect W-2s or 1099s – Did You Know?

When the time comes to get your taxes filed, it can be frustrating to discover that you have not received the documents you need to complete your return. This problem occurs most often with Form W-2 (Wage and Tax Statement for employees) or the various versions of Form 1099 (for earnings as an independent contractor, pension or IRA distributions, etc.).

If you have not received an anticipated W-2 or 1099, you should first contact the employer or payer to request the missing document. The same applies if a form you received contains incorrect information.

If you have received an incorrect Form 1099-G for unemployment compensation from your state employment office, contact the agency immediately. An incorrect form may indicate that a scammer collected unemployment benefits using your Social Security Number (SSN).

02/06/2023

Benefits of Filing Early - Did You Know? (2/2)

The IRS deadline for filing 2022 tax returns is April 18, 2023 but there are multiple advantages to filing electronically as soon as possible. These advantages include:

- Faster Refund: Processing of returns by the IRS may slow down in April, as the number of returns submitted increases. For early filers who provide direct deposit information, the IRS issues most refunds within 21 days, or by as soon as February 28 for those who claim the Additional Child Tax Credit or Earned Income Tax Credit.
- No Need to Request A Filing Extension: If you start early, then even if a problem comes up like a missing wage statement or other tax document, you will have plenty of time to resolve the issue before the filing deadline.
- More Time to Request An Installment Plan: Discovering at the last minute that you owe more tax than you can pay may lead to tax problems, including IRS penalties. Filing early may give you time to properly request an installment payment arrangement with the IRS, helping to minimize penalties and interest charges.
- Easier to Get Help: If you need assistance preparing and/or filing your tax return, help will be easier to find in February or early March than during the final days before the filing deadline.

A tax professional can help you efficiently complete your tax return, and file it electronically for greater security and faster processing.

02/03/2023

Benefits of Filing Early – Did You Know? (1/2)

The IRS deadline for filing 2022 tax returns is April 18, but there are multiple advantages to filing electronically as soon as possible. Early filing can protect you from tax-related identity theft, where a scammer files a fake tax return using your Social Security number (SSN). The IRS only accepts one electronically filed return per SSN, so if someone else files a bogus return with your number before you, your return may be rejected.

A tax professional can help you efficiently complete your tax return, and file it electronically for greater security and faster processing.

02/01/2023

Reporting Digital Asset Transactions to the IRS – Did You Know?

Since 2020, the IRS has required taxpayers to answer a question about their involvement with virtual currencies on their tax returns. For tax year 2022, the IRS has replaced the term “virtual currencies” with “digital assets,” a category that includes not only cryptocurrencies and stablecoins, but also non-fungible tokens (NFTs).

Generally, you must answer “Yes” to the digital asset question if any of the following occurred in 2022:
- You received digital assets as payment for labor, goods or services.
- You traded digital assets or gave them away as gifts.
- You received digital assets as an award or reward, as a result of a hard fork, or due to mining, staking or similar activities.
- You sold a digital asset for cash, exchanged it for other (non-digital) property, or otherwise disposed of your financial interest in it.

You may generally answer “No” to the question if you simply held digital assets throughout 2022, moved digital assets between your digital wallets, or purchased digital assets for cash.

Generally, if you receive digital assets as payment for labor or services, you must report the value of the assets as employee income or, if you are self-employed, as business income. Many other transactions could result in a taxable capital gain. A tax professional can help you properly report your digital asset transactions, and figure and pay any tax due on them.

01/25/2023

Filing Deadline for W-2 and 1099 Forms

Taxpayers who paid employees or independent contractors in 2022 are reminded to file all required payment reporting forms by January 31, 2023.

If you operate a business and pay employees, you generally must file a Form W-2 for each employee with the Social Security Administration (SSA) by January 31. You must also send each employee a copy of their W-2

January 31 is also the deadline for 1099 forms if you are required to file 1099-MISC and 1099-NEC forms.

A business tax professional can help you determine whether you need to file W-2 or 1099 forms, and may also be able to help you submit the forms electronically.

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