Sal Rabie, CPA

Happy Tax Tuesday! Is your return taking forever to get processed? An IRS liaison stated that most of the return delays are due to them having to manually review data on returns claiming the Recovery Rebate Credit (AKA stimulus credit).... If there is a discrepancy in what you are claiming with the records they have, they forward the return to Accounts Management which then traces previous stimulus payments that were made to you. If there are any issues, they will correct the return on their end and issue the refund they believe is correct. You can then fight it out with them if they end up being wrong. If you are still waiting for your refund don't give up hope. More and more are being processed every day. Hopefully they get their act together soon and you can have some extra money in time for summer! The above is for entertainment and informational use only. Consult with your CPA regarding your specific needs. Feel free to contact me with any questions or comments. See you next Tuesday!

Happy Tax Tuesday! IRS may soon know more about what is going on in your bank account. In order to help pay for the American Families Plan and American Jobs Plan, the current administration hopes to close the "tax gap" that exists between what is believed to be owed VS what is actually collected. ... How will this happen you ask? Well, they plan on regulating tax preparers. Currently, anyone can prepare your tax returns. You don't have to pass a test or be licensed or anything (can you believe it). Who should prepare your tax returns? Sal Rabie CPA, that's who. The proposal would also require banks to provide more information reporting on the activity in your bank account. How do you like that? That way they claim they can better target enforcement activity. Of course they don't have the technology to do anything with this data so what would they really need it for? They can't even get your refund check to you on time if you calculated your own stimulus credit. The above is for informational and entertainment use only. Please contact your CPA for individualized tax advice. See you next Tuesday!

Happy Tax Tuesday! The last Tuesday before tax day. A few numbers to show you how incompetent the IRS is below. 7%. That's the portion of phone calls the IRS is answering this tax season on it's account management lines.... 2%. That's the portion of calls the IRS is answering on it's filing help lines. 20 minutes. That is the average hold time for the 2% that gets through to the IRS. 300%. Is the increase in phone calls to the account management lines this year over last. 29 million. The amount of returns being held for some manual processing due to the last minute changes to the tax code this year. 2 million. The amount of returns from LAST YEAR still being processed. $1.2 BILLION. The amount of additional funding President Biden wants to add to the IRS budget next year. The above is for informational and entertainment use only. Consult your CPA regarding your personal tax situation. Feel free to contact me with any questions or comments. See you next Tuesday !

Happy Tax Tuesday! Information on the new Child Tax Credit for 2021. This credit will begin as monthly payment.... It is a credit of $3,600 for each child under 6. It is a credit of $3,000 for each child 6 to 16. The credit will be paid out between July and December of 2021: $300 per month for kids under 6 and $250 per month for kids 6 to 16. The remaining credit will be reconciled and paid out when filing the 2021 tax return next year. Who qualifies? The income threshold will begin phase out when adjusted gross income (AGI) hits the levels detailed below. You will lose $50 of tax credit for every $1,000 over the AGI limit. Single or Married filing separately: $75K . Head of household: $112,500 Joint: $150K The payout will at first be determined by your 2020 income. If you have not filed 2020 they will look back to 2019. Unlike the stimulus payments, any amount that you do not qualify for based on your 2021 income you will have to pay back. The existing $2K child tax credit per child will go on for those making less than $200K as a single/married separate/head of household filing or less than $400K as a joint filing. The above is for information and entertainment use only. Please consult with your CPA to advise you on your individual needs. Feel free to contact me with any questions or comments. See you next Tuesday.

Happy Tax Tuesday! Are you considering getting into the marijuana trade? It will be legal soon in NY and NJ. Below are some things you should know. You can't sell it, yet.... You have to be licensed by the state, similar to a liquor license. In NY you can currently apply for a license to legally sell pot. It only costs $65,000. If you are denied a license you will be refunded $60,000. How about that math. Once licensed and sales are officially allowed by the state, you will have to account for general sales tax on every sale along with sales tax specific to marijuana, much like the special sales taxes on cigarettes. Cash business. Mary-Jane is still a schedule 1 narcotic Federally. That means the Federal government still deems it illegal even if the state says it's legal. So no bank will give you a business bank account. You will have to set up procedures and controls to deal with the vast amount cash you will be forced to use. Taxes Taxes Taxes. Being illegal at the Federal level doesn't mean you don't have to pay taxes on your illegal activities, it means you have to pay more taxes. With regard to income tax, you have to report all of the sales revenue BUT YOU ARE NOT ALLOWED TO DEDUCT ANY EXPENSES. So you pay income tax on the total sales. If you had $250,000 of sales, and had $175,000 of expenses, you would normally pay income tax on the net income of $75,000. But since pot is Federally illegal you pay income tax on the full $250,000. The above is for information and entertainment use only. Please consult with a CPA regarding your specific tax needs. Feel free to contact me with questions or comments. See you next Tuesday .