This tax season, the IRS is having special Saturday hours at many Taxpayer Assistance Centers (TACs) nationwide.
No appointments are required. The selected TACs will be open from 9 a.m. to 4 p.m. on the following Saturdays: March 12, April 9, and May 14.
The assistance centers are designed to help taxpayers get the help they need to file returns. This year, they can be especially helpful to people reconciling advance child tax credit payments or those filing directly for themselves using the IRS Free File: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
For a list of Centers that will be open on specific dates, please go the IRS website here and select the date drop down to search
From IRS Tax Tips – 2022.27:
One way people can get the new tax year off to a good start is by checking their federal income tax withholding. They can do this using the Tax Withholding Estimator on IRS.gov.
This online tool helps employees avoid having too much or too little tax withheld from their wages. It also helps self-employed people, who have wage income, estimate tax payments that they should make to avoid unexpected results at tax time. Having too little withheld can result in a tax bill or even a penalty at tax time. Having too much withheld results in less money in their pocket. The estimator can help them get to a balance of zero or a desired refund amount.
Taxpayers can use the results from the Tax Withholding Estimator to determine if they should:
The Tax Withholding Estimator asks taxpayers to estimate:
- Their 2022 income.
- The number of children they will claim for the child tax credit and earned income tax credit.
- Other items that will affect their 2022 tax return when they file in 2023.
The Tax Withholding Estimator does not ask for personally identifiable information, such as a name, Social Security number, address, and bank account numbers. The IRS doesn’t save or record the information entered in the Estimator.
Before using the Estimator, it can be helpful for taxpayers to gather applicable income documents including:
These documents are not needed to use the estimator but having them handy will help taxpayers estimate 2022 income and answer other questions asked during the process.
The Tax Withholding Estimator results will only be as accurate as the information entered by the taxpayer. People with only pension income should not use the Estimator. Those with wage income can account for current or future pension income. People with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes taxpayers who owe alternative minimum tax or certain other taxes, and people with long-term capital gains or qualified dividends.
During the summer of 2020, most of our dental practice clients received the Provider Relief Fund (PRF) Phase 2 Subsidy equal to 2% of their 2019 net collections. Many practices also received Phase 3 PRF subsidies during December 2020. HRSA requires that any practice that received PRF Grants totaling more than $10k between 7/1/20 and 12/31/20 must self-report by March 31st that those funds were utilized properly. More info is available at: https://www.hrsa.gov/provider-relief/reporting-auditing.
Please be aware that practices that don’t comply with the March 31st self-reporting deadline are at risk of forfeiting the PRF subsides received between 7/1/20 and 12/31/20. We know this because healthcare practices participating in the Medicare System automatically received a Phase 1 PRF Subsidy in early April of 2020 and needed to self-report that the funds were used correctly by 9/30/21. HRSA shut off the self-reporting portal on 9/30, reopened it briefly after that, and has since threatened that they will be requesting full refunds of the Phase 1 amounts for non-compliant practices.
Last week we started reaching out to our clients who need to self-report by 3/31/22. If you would like our assistance to comply with this requirement, please email firstname.lastname@example.org. Our fee to assist our clients who use our payroll service with the self-reporting application is $750.
The SECURE Act changed the deadline for establishing a profit sharing plan or cash balance plan in order for employer contributions to be made for the 2021 tax year. The new rules extended the 12/31/21 deadline to the tax filing deadline for your practice, including extensions. Tax returns for S-Corps and partnerships are due 3/15 while those on extension have a 9/15 deadline. Sole Proprietors and Single Member LLCs that haven’t elected to be treated as an S-Corp are due 4/15 with a 10/15 deadline if an automatic extension request is filed with the IRS.
If you have not set up a retirement plan yet, it is now possible for you to profit share yourself up to $58,000 in deductions for the 2021 tax year. If you have traditionally maxed out your profit sharing contribution, you could now add on a cash balance plan for 2021 to defer paying taxes on another $50,000 – $200,000 of income and also earning compounded tax deferred growth on the money invested.
Given the 4-6 week process of running projections and setting up a 401(k)/profit sharing plan/cash balance plan, a practice owner looking to take advantage of the new deadline might consider filing for a tax extension for their practice tax return. This later deadline applies to the Solo 401(k)s as well, providing self-employed practice owners with no staff besides a spouse with the opportunity to possibly make larger retirement plan contributions than those available with a SEP IRA.