1. How to submit tax to our office?

How to send the tax documents to RP Jones CPA:  There are 3 ways to send tax documents to us. Please use one of these methods:

  • Use our encrypted Microsoft One Drive (strongly recommended): Most clients should already have the links to their One Drive folder; please use the links to securely submit the tax documents. We will re-send the links to all the clients in the coming weeks. If you have any problems with the links, please email askmycpa@rpjonescpa.com. We strongly recommend you save the link in Favorite on a browser for further usage.
  • Send your tax documents to askmycpa@rpjonescpa.com: If you want to protect your information, please use a password for your files and let us know the password to open the files.
  • Bring or mail the tax documents to our office at 5858 Westheimer Rd, Suite 105, Houston TX 77057
  1. Key Tax filing dates
  • Individual Income Tax:
    • April 15: This is the deadline for most individuals to file their federal income tax returns for the previous calendar year. If April 15 falls on a weekend or holiday, the deadline may be extended to the next business day.
    • October 15 (with an extension): If you file for a tax extension by April 15, you have until October 15 to submit your tax return. Keep in mind that this extension applies to filing your return, not paying any taxes you owe, which should still be paid by the original April 15 deadline.
  • Business Income Tax (for sole proprietors, partnerships, and S corporations):
    • March 15: This is the deadline for most businesses that use a calendar year as their fiscal year to file their tax returns.
    • September 15 (with an extension): If a business requests an extension, the deadline for filing is extended to September 15.
  • Corporate Income Tax (for C corporations):
    • April 15: C corporations using a calendar year typically must file their income tax returns by this date.
    • October 15 (with an extension): Like individuals, corporations can request an extension to file their returns by October 15.

 

  1. Estimated Tax Payments:

April 15, June 15, September 15, and January 15: These are the due dates for making estimated tax payments for the current tax year if you are self-employed, have significant income from investments, or expect to owe a substantial amount in taxes.

Payment Period Due Date
January 1 – March 31 April 15
April 1 – May 31 June 15
June 1 – August 31 September 15
September 1 – December 31 January 15* of the following year. *See January payment in Chapter 2 of Publication 505, Tax Withholding and Estimated Tax
Fiscal Year Taxpayers If your tax year doesn’t begin on January 1, see the special rules for fiscal year taxpayers in Chapter 2 of Publication 505
Farmers and Fishermen See Chapter 2 of Publication 505

Note: If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that’s not a Saturday, Sunday, or legal holiday.

  1. Refund:

To check the status of your tax refund, you can use the official government resources or websites provided by the tax agency in your country. Here are steps to check your tax refund status in the United States:

  • IRS Website:
    • Visit the IRS’s official “Where’s My Refund?” tool on their website: IRS Where’s My Refund.
    • You will need to provide your Social Security Number or Individual Taxpayer Identification Number (ITIN), your filing status, and the exact amount of the refund you’re expecting.
  • IRS2Go Mobile App:
    • You can also check your refund status using the IRS2Go mobile app, available for download on both Android and iOS devices.
  • Phone:
    • Call the IRS Refund Hotline at 1-800-829-1954. Make sure to have your tax return information handy when you call.
  1. Itemized vs. Standard Deduction:

Itemized deductions and the standard deduction are methods used in the United States to reduce your taxable income, which ultimately affects the amount of income tax you owe. You can choose to either itemize deductions or take the standard deduction, but not both. It’s important to understand the differences between these options to determine which one is more advantageous for your specific financial situation.

Here’s an overview of both options:

a. Standard Deduction:

  • The standard deduction is a fixed dollar amount that the government allows you to deduct from your taxable income without providing any specific documentation of your expenses.
  • The standard deduction amount varies from year to year and is set by the government. It is based on your filing status, such as single, married filing jointly, or head of household.
  • Most taxpayers take the standard deduction because it is simple, requires no detailed record-keeping, and often results in a lower tax bill.

b. Itemized Deduction:

  • Itemized deductions allow you to deduct specific expenses from your taxable income, such as mortgage interest, state and local taxes, medical expenses, and charitable contributions.
  • To itemize, you must keep detailed records and receipts to substantiate your deductions. You can only deduct expenses that meet certain criteria set by the tax code.
  • Itemizing is typically advantageous when your total itemized deductions exceed the current standard deduction for your filing status.

Here are some common deductions that can be itemized:

  • Mortgage interest
  • Property taxes
  • State and local income taxes or sales taxes
  • Medical and dental expenses that exceed a certain percentage of your adjusted gross income (AGI)
  • Charitable contributions
  • Unreimbursed job-related expenses
  • Casualty and theft losses

To decide whether to itemize or take the standard deduction, you should calculate your potential itemized deductions and compare them to the standard deduction for your filing status. If your itemized deductions exceed the standard deduction, it’s generally more advantageous to itemize, as it can lower your taxable income and reduce your tax liability.

Keep in mind that tax laws change, and the standard deduction amounts and eligible itemized deductions may vary from year to year. Therefore, it’s important to stay up to date with the current tax rules and consult with a tax professional if you have questions about which deduction method is best for your situation.

  1. Donation:

Donations in the context of taxes typically refer to contributions made to eligible charitable organizations, which may be deductible on your income tax return, potentially reducing your taxable income and, consequently, your tax liability. These donations are often referred to as “charitable contributions” or “charitable donations.”

Here are some key points to understand about charitable donations for tax purposes:

  • Eligible Charitable Organizations: To qualify for a tax deduction, your donation must be made to an eligible charitable organization recognized by the tax authority in your country. In the United States, for example, this includes organizations with 501(c)(3) tax-exempt status.
  • Deductible Donations: Generally, you can deduct the value of cash or property that you donate to a qualified charitable organization. This deduction can reduce your taxable income, which, in turn, lowers your tax liability.
  • Donation Documentation: It’s important to keep records of your charitable donations. Typically, you’ll need to have written acknowledgment from the charitable organization for donations over a certain amount, such as $250 in the U.S. For donations of property, you may need to document the fair market value of the donated items.
  • Itemizing Deductions: To claim a deduction for charitable contributions, you typically need to itemize your deductions when filing your tax return. This means that you’ll list out your eligible deductions, including charitable donations, rather than taking the standard deduction.
  • Limits on Deductions: Tax laws may impose limits on the amount of charitable deductions you can claim. For example, in the United States, deductions for cash donations to public charities are generally limited to a percentage of your adjusted gross income (AGI). There are also specific rules for donations of appreciated assets like stocks.
  • Non-Cash Donations: If you donate non-cash items, such as clothing, household goods, or vehicles, the tax treatment can vary. Generally, you can deduct the fair market value of these items, but there are specific rules and requirements for documenting non-cash donations.
  • Volunteer Expenses: While you cannot deduct the value of your time or services as a volunteer, you may be able to deduct out-of-pocket expenses incurred while volunteering for a qualified charitable organization. This could include mileage, parking, and other related expenses.

It’s essential to understand the tax laws and regulations in your specific country and consult with a tax professional if you have questions about the deductibility of your charitable donations. Tax laws can change over time, so it’s a good practice to stay updated on the latest rules and requirements regarding charitable contributions for tax purposes.

  1. What’s the difference between a Form W-2 and a Form 1099-MISC or Form 1099-NEC?

Although these forms are called information returns, they serve different functions.

Employers use Form W-2, Wage and Tax Statement to:

  • Report wages, tips, and other compensation paid to an employee.
  • Report the employee’s income and social security taxes withheld and other information.

Employers furnish the Form W-2 to the employee and the Social Security Administration. The Social Security Administration shares the information with the Internal Revenue Service.

Payers use Form 1099-MISC, Miscellaneous Information or Form 1099-NEC, Nonemployee Compensation to:

  • Report payments made of at least $600 in the course of a trade or business to a person who’s not an employee for services, payments to an attorney, or any amount of federal income tax withheld under the backup withholding rules (Form 1099-NEC).
  • Report payments of $10 or more made in the course of a trade or business in gross royalties or broker payments in lieu of dividends or tax-exempt interest or $600 or more made in the course of a trade or business in rents or for other specified purposes (Form 1099-MISC).
  • Report sales totaling $5,000 or more of consumer products to a person on a buy-sell, a deposit-commission, or other commission basis for resale (Form 1099-NEC or Form 1099-MISC).
  • Report payment information to the IRS and the person or business that received the payment.
  1. Can a married couple operate a business as a sole proprietorship or do they need to be a partnership?

Unless a business meets the requirements listed below to be a qualified joint venture, a sole proprietorship must be solely owned by one spouse, and the other spouse can work in the business as an employee. A business jointly owned and operated by a married couple is a partnership (and should file Form 1065, U.S. Return of Partnership Income) unless the spouses qualify and elect to have the business be treated as a qualified joint venture, or they operate their business in one of the nine community property states.

A married couple who jointly own and operate a trade or business may choose for each spouse to be treated as a sole proprietor by electing to file as a qualified joint venture. Requirements for a qualified joint venture:

For more information about the qualified joint venture rules, see Election for Married Couples Unincorporated Businesses.

Married couple businesses in community property states may sometimes qualify to be treated similarly to a sole proprietorship. For Special Rules for Spouses in Community States, see Revenue Procedure 2002-69PDF and the Instructions for Schedule C.

  1. I use my home for business. Can I deduct the expenses?

To deduct expenses related to the part of your home used for business, you must meet specific requirements. Even then, your deduction may be limited.

You must use part of your home:

  • Exclusively on a regular basis as your principal place of business,
  • Exclusively on a regular basis as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business,
  • In the case of a separate structure which isn’t attached to your home, exclusively on a regular basis in connection with your trade or business
  • On a regular basis for storage of inventory or product samples for use in your trade or business of selling products if your home is the only fixed location of the trade or business,
  • For rental use, or
  • As a daycare facility.

Note: You don’t have to meet the exclusive use test if you satisfy the rules that apply to storage, rental, or daycare use.

Beginning with tax year 2013, a simplified method is available to qualifying taxpayers. They can claim a prescribed rate of $5 per square foot (up to a maximum of 300 square feet) directly on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), by entering the square footage of the home and square footage of the office in the applicable boxes to indicate their election to use the simplified method. For more information, see Simplified Option for Home Office Deduction and FAQs – Simplified Method for Home Office Deduction.

Note: You may not use the simplified method for rental use of your home.

Taxpayers who don’t choose the simplified method, will continue to use Form 8829, Expenses for Business Use of Your Home to compute the expense allowable as a deduction on Schedule C (Form 1040).

If you use your home in your farming business, report your expenses on Schedule F (Form 1040). Partners report their unreimbursed partnership expenses on Schedule E (Form 1040). If you are a statutory employee (box 13 of Form W-2 checked), report your expenses using the same rules as self-employed persons on Schedule C (Form 1040).

  1. What expenses are tax deductible?

The IRS states that business-related expenses must be “ordinary and necessary” in order to be tax deductible. Here is a list of common types of small business tax deductions:

  • Advertising and marketing
  • Business insurance
  • Continuing education and training
  • Depreciation of assets
  • Legal and professional fees
  • Meals with clients or employees
  • Office supplies
  • Phone and internet
  • Rent and/or home office
  • Software, app and portal subscriptions
  • Travel expenses, including meals
  • Vehicle and/or mileage for business use

An accountant can help you navigate the nuances of tax law related to education, meals and vehicle expenses.

  1. What will trigger an IRS Audit?

Although IRS audits are infrequent, there are red flags that trigger an audit. Small businesses may experience an IRS audit for:

  • Undergoing significant changes in business expenses and business income.
  • Filing an incomplete tax return.
  • File a tax return with errors.
  • Mixing business expenses with personal expenses.
  • Not making a business profit for several years.
  • Not filing a tax return if a business experiences a financial loss.
  • Operating a business that deals with a lot of cash.
  1. I just started a small business and want to know if I must pay my income taxes quarterly or at the end of the year?

You file a federal income tax return annually, but the federal income tax system is a pay-as-you-go system.

If your business is a sole proprietorship or an unincorporated single-member LLC with you as the sole owner, the income is attributable to you personally. If your business is a partnership, an unincorporated multi-member LLC, or an S corporation, the ordinary business income passes through to members and is attributable to them on their personal returns.

If you expect to owe more than the amount allowed by law at the end of the year after deducting any withholding on other income and refundable credits:

  • You should make quarterly estimated tax payments or increase the withholding on other income subject to withholding.

Form 1040-ES, Estimated Tax for Individuals and related instructions will assist you in determining if you need to make estimated tax payments, their due dates and how to pay them.

When you file your income tax return each year:

Generally, all other corporations must make installment payments if they expect their estimated tax for the year to be $500 or more.