Question: I am self-employed with my husband and keep receiving alerts about a tax credit for paying employees during COVID-19. I’m skeptical because it seems like a scam, but these alerts appear genuine and tax regulations can be complex. Are others experiencing this too?
Answer: The situation you’re describing sounds like a scheme that takes advantage of the Employee Retention Credit (ERC). According to the Internal Revenue Service (IRS), the credit is not as readily available as some aggressive fee-based promoters claim. As part of its annual “Dirty Dozen” review of tax scams, the IRS has cautioned against fraudulent schemes that encourage ineligible individuals to claim the credit. Tax attorney Adam Brewer from Hawaii and California confirms this.
It’s important to exercise caution and not fall for solicitations related to the ERC. While the credit can be valuable for qualifying businesses, eligibility criteria are stringent, and the IRS actively investigates fraudulent claims. Additionally, some of these alerts may be attempts to steal personal information through identity theft.
If you’re unsure about your eligibility for the credit, it’s advisable to consult the IRS website (irs.gov) or seek guidance from a trusted tax accountant or attorney. Rely on local advice rather than unverified social media posts or emails.
According to the IRS website, “eligible taxpayers can claim the ERC on an original or amended employment tax return for qualified wages paid between March 13, 2020, and Dec. 31, 2021.” To qualify, an employer must meet one of the following conditions:
>> Sustained a full or partial suspension of operations due to COVID-19-related orders from a governmental authority that restrict commerce, travel, or group meetings during 2020 or the first three quarters of 2021.
>> Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021.
>> Qualified as a recovery startup business during the third or fourth quarters of 2021.
Q: I have a tax question that I can’t find an answer to on the IRS website, and I can never reach them by phone. Should I file my taxes and then amend them later?
A: It’s not advisable to file with the intention of amending later, as processing delays and unanswered questions could complicate matters. Strive to file an accurate return on time with the available information. If necessary, consider consulting a tax accountant or attorney for assistance.
Continue attempting to reach the IRS and check their website for updates. Using tax preparation software is another option as it guides filers through relevant questions.
If your adjusted gross income is $73,000 or less, you can consider using IRS Free File. Regardless of how you complete your return, the IRS recommends submitting it electronically rather than by mail.
In response to another reader’s question, it’s generally unnecessary to confirm information found on the IRS website by speaking to an agency representative. According to Brewer, for the general public, the information provided by an IRS representative over the phone would likely be the same as what’s available on their website.
Q: The IRS still hasn’t processed my 2021 return. Should I file an extension for 2022?
A: No, you should not file an extension for 2022 just because your 2021 return hasn’t been processed. Brewer advises that you file your 2022 return on time regardless of the processing status of your 2021 return.
The IRS provides a tip for individuals waiting for the processing of their 2021 tax return to submit their 2022 return electronically successfully. In the 2022 return, enter $0 as last year’s adjusted gross income if you’re still awaiting the processing of your 2021 return. Otherwise, enter the adjusted gross income from your prior year’s return.
If your 2021 return hasn’t been processed, you may need to resubmit it. Use the “Where’s My Refund?” tool on the IRS website (www.irs.gov/refunds) for updates and instructions.
If you meet the following conditions: you’re due a refund, you filed a paper return over six months ago, and “Where’s My Refund?” doesn’t indicate that the IRS received your return, it’s recommended that you resubmit your return electronically if possible.
Write to Kokua Line at Honolulu Star-Advertiser, 500 Ala Moana Blvd., Suite 7-500, Honolulu, HI 96813; call 808-529-4773; or email [email protected].
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
