The percentage jumps in this survey seem significant given that in recent years preparers prep fees tend to increase about 5 percent a year, with higher increases coming in the wake of tax law changes or the retooling of forms, both of which happened in the last two years.

Flat-fee or Bill-by-form has also become much more popular (81 percent of respondents) than hourly billing.

For more information please visit: https://www.accountingtoday.com/news/big-jumps-seen-in-tax-prep-fees-survey

The post Big Jumps seen in Tax Prep Fees appeared first on Salt Lake City's CPA's.

Unsigned forms and expired ITINs also make the list of frequent mistakes, as do wrong deductions and credits. Some preparers have also found that their clients are struggling with the new W-4. The issue has arisen from many people being under-withheld in 2018, the first year of the numerous tax changes. Reform reduced the taxes taken out of many paychecks. Many clients failed to recalculate withholdings — and dropped their jaws at their tax returns a year ago yet often failed to heed preparers’ advice. Many clients have not adjusted their withholdings and need an explanation as to why they owe more or their refund is less this year.

A taxpayer had a large tax bill for 2018, went on an IRS payment plan, and was provided estimated payment vouchers by tax prep software. The 2019 tax year also had a large tax-due amount, and the client had used all the free cash they had for a down-payment on additional investment property. A huge problem and a huge mistake so, take your tax obligations seriously.

This mistake is rampant enough during the pandemic that the IRS is postponing certain payments related to installment agreements and offers in compromise and limiting certain enforcement initially — at least — through the new Tax Day of July 15.

This coming off-season may be rife with another common mistake in the wake of the pandemic. Clients may neglect thinking about the impact of a home purchase or sale, kids going to college, family illness or death, or starting a business. A bit of planning now can help avoid unpleasant surprises at tax time. It may seem like it doesn’t matter at the moment, but it is always better to be in the know when tax time arrives.

For more information visit: https://www.accountingtoday.com/news/timeless-blunders-what-mistakes-are-clients-making-this-season?position=editorial_7&campaignname=ACT%20Best%20of%20the%20Week-04252020&utm_source=newsletter&utm_medium=email&utm_campaign=ACT_Weekly_Best+of+the+Week%2B%27-%27%2B04252020&bt_ee=wW2WAGyiou2vaZCFyOXEqFr7mrd%2F4HYaBA%2FfzwxZAo2RsR14wKmmZ7StQioupFmb&bt_ts=1587819742385

The post Common Mistakes Taxpayers are making and how to avoid them appeared first on Salt Lake City's CPA's.

The IRS said it will use the information on the Form SSA-1099 and Form RRB-1099 to generate $1,200 economic impact payments to Social Security recipients who didn’t file tax returns in 2018 or 2019. Social Security recipients will receive the stimulus payments.

The post IRS will allow coronavirus stimulus payments for seniors who don’t file tax returns appeared first on Salt Lake City's CPA's.