Wenatchee CPA Offers Tax Tips As Deadline Approaches
Less than three weeks remain until your 2022 IRS tax return is due on April 18th this year, due to a quirk of the calendar and a holiday in Washington, D.C.
Every week local CPA's from Cordell, Neher and Company in Wenatchee answer questions on NewsRadio 560KPQ's Tax Tip Thursday program.
Local certified public accountant Kyle Meissner of Wenatchee offered a few timely reminders including the IRS's Annual “Easy Steps to avoid tax return errors” punch list:
· Gather all documents, W-2’s, 1099’s, copy of last year’s tax return
· File electronically- through IRS E-file or other e-file service
· Use correct filing status
· Double check name, birth date, and social security number entries
· Answer the digital assets question
· Report all taxable income (IRS matches to all forms received)
· Double check routing and account numbers for direct deposit of your tax refund
· Mail paper returns to correct address- e-file if at all possible!!!
· Sign and date return
· Keep a copy
· Request an extension to file, if needed It is not an extension to pay taxes due
By this date, most taxpayers have likely filed a return if they expect a refund according to Meissner. His guidance for when to expect a refund to arrive will vary based on whether you filed electronically (e-file)
When can you expect your refund?
· If you E-file: Expect a refund within 3 weeks of IRS acceptance of your return
· If you file a paper return: Expect a lengthy wait
Meissner suggests you check the status of your refund online at IRS.gov at the “where’s my refund” link
The status updates are usually available within 24 hours of the date you e-file or a minimum of 4 weeks or more after filing a paper return. That turnaround time is why Meissner says most tax preparers urge you to e-file to get the status and your refund much faster.
If you are still working on your return and work a side job in the "gig" economy like Uber or Doordash or are employed where tipping is part of your income, Meissner has these last minute reminders to not overlook the reporting all income including:
- All Gig economy income must be reported whether it is part time or temporary work
- Income paid in any form, including cash, property, goods, or digital currency must be reported
- Income not reported on forms like a 1099-K, 1099-MISC, W-2, or others must also be reported.
- Cash tips should be reported to employer so they can be included on employee W-2
- Don't forget to report any non-cash tips you receive that aren’t reported to employer should be reported on employee tax return separately on form 4137. The employee pays social security and medicare tax on these amounts
However, Meissner says tips totaling under $20 per month, per employer don’t need to be reported to employers.
One Cautionary Note!
Meissner is also cautioning any taxpayer to be aware of the social media “scam” encouraging taxpayers to use false wage and withholding information to generate a large refund. Taxpayers need to remember the IRS matches wages and withholding to W-2’s filed by employers and the IRS is looking for signs of the tax fraud. IRS will require tax to be paid back with penalties and interest and possibly a frivolous return penalty of $5,000 and criminal penalties.
Tax Tips Thursday airs on KPQ's The Agenda program 1pm - 2pm through 13th.