Tax Updates Mid May

Be Prepared For Disaster

Ahead of hurricane season, the IRS is reminding taxpayers to create or review their emergency preparedness plans, including protecting important tax-related information. The following tips are advised:

Protect documents – original tax returns, birth certificates, titles and insurance policies should be kept in waterproof containers in a secure place. Duplicates or digital copies should be made and deposited with a trusted person outside the area.
Document property – home or business photos, including contents, can help if insurance claims must be made.
Check fiduciary bonds – employers should ensure that their payroll provider has a fiduciary bond in place, which would protect the employer in the event of default by the provider.
Reconstructing documents – the IRS has a webpage to help.

In honor of National Small Business Week, the IRS is highlighting many tax benefits and resources for entrepreneurs:

Free resources and information for starting a business
Plan for 2022 tax benefits – enhanced deduction for business meals and home office deduction.
Estimated tax payments – making quarterly payments electronically is fast and easy.
How and why to use e-file – report payroll taxes and pay taxes electronically.
Special tax credit for hiring certain workers – unemployed, those on SNAP or other benefits, residents of Empowerment Zones, and other qualified individuals.

The IRS is encouraging residents of Puerto Rico with even one child to file a federal tax return to claim the Child Tax Credit. Beginning with Tax Year 2021, the Credit is available, even if they had no income, only tax-exempt income, or paid no US Social Security taxes. If the April 18 filing deadline was missed, returns can still be filed without penalty to claim the Credit through April 15, 2025. Additionally, the IRS is expanding outreach to serve Puerto Rico residents who may have little or no experience filing a federal tax return. “Not only do we want them to know about the credit, but we also want them to know there is help – some of it free – for getting it.”