Magaña & Rathi Income Tax Services

02/10/2023

If you don’t have faith leading you in your journey… you’re probably lost.

Winning in this game, finding success in life….a lot of it comes down to the certainty you have. The BELIEF in what you’ve been called to do, and he person you’ve been called to be...

So stop dabbling, get out there and start fulfilling your mission with 100% certainty!!! You were made for this :)

01/13/2021

Family and Friends we will lay our beloved Rosa Magana Rathi to rest on Thursday, January 21, 2021 at 11:00 a.m. at the Ceres Memorial Park located at 1801 E. Whimore Ave. In Ceres, Ca. for a graveside service.
There are restrictions in place if you plan on attending. Everyone must wear a face mask and socially distance themselves. The funeral ceremony will begin at 1100 a.m. at the cemetery and will end there as well. Also due to the COVID 19 pandemic the family has decided not to meet for a celebration of life after the funeral out of an abundance of caution.
The family expresses their most heartfelt appreciation for everyones support during this difficult time and for all of the donations.

NOTE: There will not be any viewing or any chapel services. The ceremony will begin and end at the cemetery.

For any flower donations please have them delivered to the cemetery on January 21st before 11 AM.

The GoFund Me link for Rosa will close Friday January 15th, 2021 at 8:00 PM.

Thank you.

Magana Family

12/01/2020

Common errors to avoid when claiming employer tax credits

Employers who are filing Form 941, Employer's Quarterly Federal Tax Return and claiming an employer tax credit should read the instructions carefully and take their time when completing the form to avoid mistakes.

Using a reputable tax preparer including certified public accountants, enrolled agents or other knowledgeable tax professionals can also help avoid errors. Mistakes can result in a processing delay or a balance due notice, which could mean a delay or require filing an amended return.

Here are some common mistakes to avoid when completing Form 941:

Reporting advances requested instead of the advance payments of credits received. If the EMPLOYER hasn’t received the advance payment of credit they requested, it should not be reported on their 941.
Incorrectly reconciling the advance payment of the credit requested and received. If an employer has received the advance payment requested, they must reconcile it on Form 941 by reporting the advance payments received on line 13f and claiming the credits they’re eligible for on lines 11b, 11c, 13c and 13d.
Form 7200 is used to request the advance payment of employer credit. It is not used to claim the credit.
If employer receives an advance payment of credit, but doesn’t report it on Form 941, they may receive a balance due notice.
If a taxpayer receives a balance due notice, they will need to file an amended return using Form 941-X to report their advance payments and claim their eligible credits.
Employers using third-party payers or reporting agents must tell their third-party payer or agent they requested and received an advance payment of credit. These third-party payers and reporting agents should also ask employers if they requested and received an advance payment of credit using Form 7200, Advance Payment of Employer Credits Due to COVID-19.

12/01/2020

How the CARES Act changes deducting charitable contributions

Here’s how the CARES Act changes deducting charitable contributions made in 2020:

Previously, charitable contributions could only be deducted if taxpayers itemized their deductions.

However, taxpayers who don’t itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security Act.

12/01/2020

Tips to help people stay safe online

These days most people are spending more time at home and a lot more time online. Whether people are online for work, school, a virtual gathering or shopping, online security is more important than ever.

Everyone should be mindful of risks they may encounter when they share devices, shop online and interact on social media.
Taxpayers might find the online security overwhelming, but it doesn't have to be. Even those who aren't super tech-savvy can stay safe online.

Remember security is important.
No one should reveal too much information about themselves. People can keep data secure by only providing what is necessary. This reduces online exposure to scammers and criminals. For example, birthdays, addresses, age and especially Social Security numbers are some things that should not be shared freely. In fact, people should not routinely carry a Social Security card in their wallet or purse.

Use software with firewall and anti-virus protections.
People should make sure security software is always turned on and can automatically update. They should encrypt sensitive files stored on computers. Sensitive files include things like tax records, school transcripts and college applications. They should use strong, unique passwords for each account. They should also be sure all family members have comprehensive anti-virus protection for their devices, particularly on shared devices.

LEARN TO RECOGNIZE & AVOID SCAMS
Everyone should be on the lookout for scams. Thieves use phishing emails, threatening phone calls and texts to pose as IRS employees or other legitimate government or law enforcement agencies. People should remember to never click on links or download attachments from unknown or suspicious emails. If someone calls asking for personal information, people should not to give out such details.

PROTECT PERSONAL DATA
Adults should advise children and teens and other young users to shop at reputable online retailers. They should treat personal information like cash and shouldn’t leave it lying around.

KNOW THE RISK OF PUBLIC WI-FI
Connection to public Wi-Fi is convenient and often free, but it may not be safe. Hackers and cybercriminals can easily steal personal information from these networks. Always use a virtual private network when connecting to public Wi-Fi.

11/30/2020

You may register for free to see if you are able to help someone receive the gift of life. I'm still looking for my bone marrow donor and there are many people out there waiting to receive a bone marrow transplant.

11/30/2020

ABLE accounts are a valuable benefit for taxpayers with disabilities

Living with a disability can come with additional expenses. Achieving a Better Life Experience accounts are authorized tax-advantaged 529A accounts that help disabled people pay qualified disability-related expenses.

Here are some key things people should know about these accounts.

Annual contribution limit

The limit remains $15,000 in 2020.
Certain employed ABLE account beneficiaries may make an additional contribution up to the lesser of these amounts:
The designated beneficiary’s compensation for the tax year
The poverty line for a one-person household. For 2020, this amount is $12,490 in the continental U.S., $15,600 in Alaska and $14,380 in Hawaii.
Saver’s credit

ABLE account designated beneficiaries may now be eligible to claim the saver's credit for a percentage of their contributions.
The beneficiary claims the credit on Form 8880, Credit for Qualified Retirement Savings Contributions. The saver’s credit is a non-refundable credit available to individuals who meet these three requirements:
Are at least 18 years old at the close of the taxable year
Are not a dependent or a full-time student
Meet the income requirements
Rollovers and transfers from section 529 plans

Families may now roll over funds from a 529 plan to another family member’s ABLE account.
The ABLE account must be for the same beneficiary as the 529 account or for a member of the same family as the 529 account holder. Rollovers from a section 529 plan count toward the annual contribution limit. For example, the $15,000 annual contribution limit would be met by parents contributing $10,000 to their child’s ABLE account and rolling over $5,000 from a 529 plan to the same ABLE account.
Qualified disability expenses

States can offer ABLE accounts to help people who become disabled before age 26 or their families pay for disability-related expenses. These expenses include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology and personal support services.
Though contributions aren’t deductible for federal tax purposes, distributions, including earnings, are tax-free to the beneficiary, as long as they are used to pay qualified disability expenses.

More Information:
ABLE Accounts - Tax Benefit for People with Disabilities
Publication 907, Tax Highlights for Persons with Disabilities
Form 1099-QA, Distributions from ABLE Accounts
Form 5498-QA, ABLE Account Contribution Information
Instructions for Forms 1099-QA and 5498-QA

11/30/2020

https://www.irs.gov/individuals/steps-to-take-now-to-get-a-jump-on-next-years-taxes

Steps to Take Now to Get a Jump on Next Year’s Taxes

11/30/2020

Special $300 tax deduction helps most people give to charity this year – even if they don’t itemize

WASHINGTON – The Internal Revenue Service today reminded taxpayers of a special new provision that will allow more people to easily deduct up to $300 in donations to qualifying charities this year.

Following special tax law changes made earlier this year, cash donations of up to $300 made before Dec. 31, 2020, are now deductible when people file their taxes in 2021.

“Our nation’s charities are struggling to help those suffering from COVID-19, and many deserving organizations can use all the help they can get,” said IRS Commissioner Chuck Rettig. “The IRS reminds people there’s a new provision that allows for up to $300 in cash donations to qualifying organizations to be deducted from income. We encourage people to explore this option to help deserving tax-exempt organizations – and the people and causes they serve.”

The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted last spring, includes several temporary tax changes helping charities, including the special $300 deduction designed especially for people who choose to take the standard deduction, rather than itemizing their deductions.

Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify for this new tax deduction. In tax-year 2018, the most recent year for which complete figures are available, more than 134 million taxpayers claimed the standard deduction, just over 87% of all filers.

Under this new change, individual taxpayers can claim an “above-the-line” deduction of up to $300 for cash donations made to charity during 2020. This means the deduction lowers both adjusted gross income and taxable income – translating into tax savings for those making donations to qualifying tax-exempt organizations.

Before making a donation, the IRS reminds people they can check the special Tax Exempt Organization Search tool on IRS.gov to make sure the organization is eligible for tax-deductible donations.

Cash donations include those made by check, credit card or debit card. They don’t include securities, household items or other property. Though cash contributions to most charitable organizations qualify, some do not. Check Publication 526, Charitable Contributions, and the TEOS for more information.

Though cash contributions to most charitable organizations qualify, those made to supporting organizations and donor-advised funds do not.

The IRS reminds everyone giving to charity to be sure to keep good records. By law, special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining a receipt or acknowledgement letter from the charity, before filing a return, and retaining a cancelled check or credit card receipt. For details on these recordkeeping rules, see Publication 526, available on IRS.gov.

In addition, the CARES Act includes other temporary provisions designed to help charities. These include higher charitable contribution limits for corporations, individuals who itemize their deductions and businesses that give food inventory to food banks and other eligible charities. For more information about these and other Coronavirus-related tax relief provisions, visit IRS.gov/Coronavirus.

We are offering help for taxpayers, businesses, tax-exempt organizations and others – including health plans – affected by coronavirus (COVID-19).

11/30/2020

Get ready to file taxes: What to do before the tax year ends

There are things taxpayers can do before the end of the year to help them get ready for the 2021 tax filing season. Below are a few of them.

Donate to charity
There is still time to make a 2020 donation. Taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying charities. Cash donations include those made by check, credit card or debit card. Before making a donation, people can check the Tax Exempt Organization Search tool on IRS.gov to make sure the organization is eligible for tax-deductible donations.

The Coronavirus Aid, Relief, and Economic Security Act changed this law. The CARES Act also temporarily suspends limits on charitable contributions and temporarily increases limits on contributions of food inventory.

Report any name or address change
Taxpayers who moved should notify the IRS of their new address. They should also notify the Social Security Administration of any name change.

Renew expiring ITINs
Certain Individual Taxpayer Identification Numbers expire at the end of this year. Taxpayers can visit the ITIN page on IRS.gov for more information on which numbers need renewal.

Connect with the IRS
Taxpayers can use social media to get the latest tax and filing tips from the IRS. The IRS shares information on things like tax changes, scam alerts, initiatives, tax products and taxpayer services. These social media tools are available in different languages, including English, Spanish and American Sign Language.

Find information about retirement plans
IRS.gov has end-of-year find tax information about retirement plans. This includes resources for individuals about retirement planning, contributions and withdrawals. The CARES Act retirement plan relief waived required minimum distributions during 2020 for IRA or retirement plan accounts. Also, eligible individuals can take a coronavirus-related distribution of up to $100,000 by December 30, 2020 and repay it over three years or pay the tax due over three years.

Contribute salary deferral
Taxpayers can make a salary deferral to a retirement plan. This helps maximize the tax credit available for eligible contributions. Taxpayers should make sure their total salary deferral contributions do not exceed the $19,500 limit for 2020.

Think about tax refunds
Taxpayers should be careful not to expect getting a refund by a certain date. This is especially true for those who plan to use their refund to make major purchases or pay bills. Just as each tax return is unique to the individual, so is each taxpayer's refund. Taxpayers can take steps now to get ready to file their federal tax return in 2021.