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The Future of the Tax Refund

1/30/2020

Tax season is here, and we are ready to tackle it head-on. With all the anxiety that tax season can bring, we wanted to give you something to look forward to.

We are inching closer to tax day by the minute, and it's time to stay focused and not get overwhelmed with what's to come. We are here to help you with all of your needs from now until it's over. So please do not hesitate to visit us! Make sure you and your family members are ready and prepared for tax day, and get everything filed on time. The last thing we want is to have you accrue late fees or other issues down the line with the IRS. To ease any worry or pain, we wanted to share with you when you should be expecting your 2020 tax refund. Everyone loves a refund, right? A refund is what so many of our clients look forward to every year, and we can't blame them. They are like little (or hopefully bigger than you expected) consolation prizes for getting your taxes done on time and done properly. As we've discussed in some of our recent blogs, the tax reform laws that started to take effect in 2018 will affect your tax refunds through 2020 and it will affect how much you could potentially be getting back in those refunds. Many factors determine when you receive your refund, some of them depend on you while others will depend on the government and the IRS.

On Your Plate

Getting your tax refund back quicker does depend on when you file. The sooner you get them in, the quicker it will be sent back to you!
It depends if you submit everyone online or if you mail everything in. Submitting electronically will get your taxes submitted instantly, while the mail can take up to 3 to 4 days to arrive. Then, you will need to tack on a little more time for processing too.
If you decide to claim certain tax credits, it will take time to go through each and verify them. This will add more to your wait time and more time on the IRS's end.
If you owe previous amounts in taxes, if you have accrued any late fees, or have any other issues that have not been resolved from previous years, you will need to spend time addressing these issues along with taking care of the current year's taxes. This will add on time to both your end of tax time and that of the IRS.

On Their Plate

Depending on any tax laws changed or made in December, tax season might be pushed back to early February. This will delay when you can submit electronically and when you can mail in your tax documents.
Some tax credits tend to be abused, so if you choose to file certain tax credits you could be facing up to 2 to 3 weeks of delays. Such tax credits that could see delays are the Earned Income Tax Credit and the Child Tax Credit. If you do choose to use these credits, please do so correctly.
Remember that this year's electronic filing begins on Monday, January 27th. The moment the IRS receives your information from that day forward, the processing will begin.

The Time Frame

Like we mentioned before, the sooner you send in your taxes, the sooner you will receive the refund. Across the board though, if you file in the last week of January once the filing is open through the first two weeks in February, you could get your return back as quickly as a week. Once you file it past these dates, it can take up to a month or longer to get your return back.

Things To Remember

If you file electronically, it takes between 1 to 3 days for it to be accepted by the IRS. From the date it is accepted, that is when you need to calculate when you will receive your return.
If you mail in your taxes, the IRS does state that taxpayers should expect a 3 to 4 week wait period just at the beginning of receiving your documentation, since they will have to put everything in manually.
The best thing you can do for yourself is to work with a company like ours. Hire a professional to file everything properly, legally, and on time. Our tax professionals can also help estimate an even better return date for you!
There are apps available to you on almost all platforms that can help you track your refund. There is a "Where's My Refund" tool on the IRS website, and an IRS app that can help you track the process too.
The IRS highly recommends that you file electronically.

We are here to help you, bring you peace of mind, and get your refund money back in your pocket as quickly as possible. With this knowledge, it's easy to see that we can help skip some serious wait time and help you avoid worry for this tax season, and the many seasons to come. So until next time, keep this information in mind, stay organized, and visit us to help get your taxes filed on time!

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Tax Season is Here

1/16/2020

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The new year brings many new and exciting things, it is also the start of tax season. There have been many changes to business and federal taxes, but with all of these changes, personal taxes will also be seeing many changes for the 2019 and 2020 tax season. Are you familiar and up to date on these changes? If not, you've come to the right place!

2020 is officially here! Some people might be spending a little extra time at the gym and meal prepping, while all of us at Hood's are spending more time getting our clients and future client's in the Goose Creek area ready for April 15th with no surprises or stress. Every year, something changes with tax law. These changes might be small and easy to deal with, while other years prove to be rather difficult. It takes time and dedication to stay up to date on these changes, so why not take advantage of our services to make sure your taxes are prepared efficiently, on time, and with no worry about being charged any late fees?

While you are starting to gather your tax documents, there is quite a list of things you will need to keep in mind. Please take the time to read through every one of these changes before you start filling out any paperwork for 2019 and 2020. We talked a lot about changes for forms and filing in our last blog. In this blog, we will be discussing some of the benefits that will hopefully make paying your taxes a little easier.

Capital gain rates will not change for 2020, whereas the brackets for capital gain rates will be changing.
The IRS has increased the standard deduction to $12,400 for single filers and $24,800 for married couples filing together.
An individual can transfer up to 11.58 million dollars without being subject to the 40% federal estate and gift tax. Last year the rate was 11.4 million, so we are seeing a bit of a raise.
Individuals are now allowed to and will have the option to save more in their HSA accounts and 401(K)'s.
The standard deduction for married joint filers has gone up 400 dollars and the standard deduction for married individuals filing separately has gone up 200 dollars.
Whoever is filing as "head of the house" will now find that the standard deduction will be going up 300 dollars.
Certain tax credits and retirement savings limits will also be seeing increases.
These inflation numbers by the IRS have been decided on to make paying federal taxes a little easier and a little less painful.
Each bracket of almost all personal taxes, as you have seen listed above, will be receiving some kind of change. With each bracket that an individual will file under, they will have to hit certain criteria to be considered for some of these new benefits and for them to really affect the taxpayer.

Use these new changes in your personal taxes to prepare for this tax season and the next. They may not benefit or affect you this year, but they could have a significant effect on you in the years to come and for the better. Are you planning on retiring next year? How about getting married? Are you starting a new job that offers you a 401(k) for the very first time? Are you dealing with an HSA account for the first time or wanting to expand one? The changes we have mentioned above will help you decide and understand the best routs to take with these important decisions.

Please don't stress when it comes to taxes. Our professionals can help you with all of these changes, and answer any questions you might have. Please take into account that this list is just an overview of some of the changes happening, it doesn't cover all of the changes that could be affecting your personal taxes in the years to come. Come visit us and depend on Hood's to get everything taken care of, and to understand what changes are heading your way for this tax season and the many seasons to follow!

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The Truth about Year-End Taxes

1/2/2020

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There are many loose ends you need to tie up at the end of any year for your personal taxes and those of your small business. You also need to be staying on top of the many changes coming your way in 2020 taxes. You might have more work ahead of you, so it's better to be prepared now for what is quickly heading your way.

You've made it through the holidays and all the celebrations that go along with them, both in your job and with your families. As tax season approaches for the 2019 fiscal year, you need to start thinking about a few new changes that you'll be seeing sooner rather than later, along with tying up a few loose ends.

Do yourself a favor and don't put yourself in a bad position scrambling to figure out what has changed in health care and new tax legislation. Use this blog and other resources to stay up to date with this information. Try and update yourself at least once a quarter, and keep your eyes and ears open to what might be heading your way. The information is out there for you, don't avoid it.
If you aren't prepared or wanting to stay on top of this information, hire and work with someone who is.
You must figure out what year-end tax reporting requirements have changed between the last tax season to now.
You need to figure out what new tax compliance challenges 2020 is going to bring. There are also a handful of changes that you will be seeing come this tax season as well.

In this blog, we won't be discussing all of the changes that are heading your way. We will just be touching on some of the most important. You will see changes in the W-4 form in 2020, in State withholding, Federal W-2s and State Deadlines, ACA Compliance from the State, and in Gig Economy and worker classification.

Changes with W-4 Forms
In 2020 you're going to see changes with the IRS W-4 tax form. They have changed the form and given it a bit of a facelift. The changes include calculations for income tax withholding. There is a new form that has been added for the head of the household as well. The new form eliminates withholding allowance. As an employee, you will just adjust your withholdings by putting your tax information on your W-4 forms. This will include non-wage income, full-year deductions, and any child or any other dependent tax credits. If you own a small business or are getting a new job in the year to come, filling out tax papers will be much different than previous years. Since you probably don't know all of your tax information off the top of your head, and you probably won't be carrying around copies of last year's tax refund, take more time filling out the paperwork. If you are a business owner, allow your employee to take it home. Ask your new employer for a private space to call home or your tax professional to fill out all the information. If you are happy with your current withholdings at your job now, you will not need to fill out the w-4 form again. If you need to change anything for your future taxes, you will have to fill out the new paperwork.

State Withholdings
The new W-4 paperwork could affect state tax withholdings. Many states are still trying to figure out how to work with these new changes, so you or your small business won't be the only one trying to follow along. You will need to prepare for these changes by the end of next year, as their decisions on how to deal with these new changes will also affect how you file your taxes. The main issue many states are dealing with right now is the fact that there is no longer a box for allowances on the federal tax forms. Different states are picking different ways to handle the situation. One option that might become the norm is taking the focus away from income tax and shifting to pay-roll taxes. This might not be a very fun solution for many of us, but be prepared. When it's time to do taxes and paperwork for 2020, make sure to pay attention to the choices your state has made to deal with the W-4 changes.

Federal W2s and State Deadlines
In 2020 the tax rate will remain the same for employees and employers, at 6.2%. Medicare tax rates will also stay the same as they were in 2019. The IRS has now moved up the W-2 submission deadline to January 31st. They have done this to continue the fight against tax fraud and identity theft. Most states will now require electronic W-2 filing from your employers. Many states have also increased the penalties for late filings of W-2 forms. Be very aware of these due dates. These fees can add up very quickly and become very costly.

The good news for you, if you're feeling overwhelmed for next year's tax season, is that we are here to help you keep up to date on these changes. We are here to help you understand them, help guide you through them, and prepare for them. These charges vary from small differences to ones that will affect you on a state and federal level. Just like any tax law changes, the new ones we will be seeing in 2020 will evolve into others. So don't get too comfortable. Stay connected, educated, and ready for the unexpected.

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Hoods Tax &
Accounting Blog

The Future of the Tax Refund

Tax Season is Here

The Truth about Year-End Taxes

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​Hoods Tax &Accounting Blog

The Future of the Tax Refund

Tax Season is Here

The Truth about Year-End Taxes

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Archives

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Hoods Tax &
Accounting Blog