Drake Software

Now that the income tax filing deadline has passed, it’s a good time to take a hard look at whether we have the right amount of taxes withheld from our paychecks. After all, getting hit with a big tax bill after filing can often mean that the employee isn’t withholding enough of their paycheck to…

With restaurants beginning to open more fully due to a break in the coronavirus pandemic, employees in the food and beverage industry are soon likely to have a lot more to report on their taxes: Tips. That’s why the Internal Revenue Service is reminding taxpayers that that tips should be included in gross income when…

It was a wise man indeed who first warned us to “hope for the best, but prepare for the worst.” The Internal Revenue Service is following in those footsteps by reminding taxpayers that spring begins a very active period for weather in the U.S. In light of that, May includes both National Hurricane Preparedness Week…

Sometimes, taxpayers find themselves with a tax bill they just can’t satisfy. The taxpayer is willing to pay, but the bottom line is more than they can afford. Circumstances like this are made for compromise; or more precisely, an offer in compromise. Meeting in the middle … “An offer in compromise is an agreement between…

Partnerships and S corporations that will have to report “international tax matters” in 2022 can now review the new draft releases for Schedules K-2 and K-3. The IRS today announced the early release drafts, noting that instructions would follow sometime in the summer. “The redesigned forms and instructions will also give useful guidance to partnerships,…

The Internal Revenue Service has kept taxpayers’ mailboxes busy for months now, sending out notices to taxpayers about the various Economic Impact Payments that have been issued. The agency was required to mail a notice to the last known address of each Economic Impact Payment (EIP) recipient every time a new EIP was issued. So,…

As the old phrase goes, things are looking up. The Internal Revenue Service says more Economic Impact Payments (EIP3) are coming this week—a second round that will include paper checks and prepaid debit cards. Taxpayers getting direct deposits will see a deposit date of Wednesday, March 24, with some recipients getting their deposits even sooner.…

Taxpayers, no matter their age, may be able to claim a deduction on their 2020 tax returns for contributions to their Individual Retirement Arrangement (IRA) if they make them by April 15. Contributions to a traditional IRA are usually tax-deductible, and distributions are generally taxable. Taxpayers have from now to April 15, 2021, to make…

It’s not uncommon for taxpayers to forget some of the tax documents required to accurately file their return, even in a normal year. When dealing with a chaotic mix of mail delays, new tax credits, underemployment, and unemployment, it’s almost guaranteed that there will be at least a few issues. That’s why the Internal Revenue…

The Internal Revenue Service says its interest rates will hold at previous levels for the second quarter of 2021. The IRS says the interest rates will be: 3% for overpayments (2% in the case of a corporation); 0.5% for the portion of a corporate overpayment exceeding $10,000; 3% for underpayments; and 5% for large corporate…