K & K Financial and Tax Services

IRS has begun sending letters to taxpayers that may need to take action related to Qualified Opportunity Funds WASHINGTON The Internal Revenue Service has started sending letters to taxpayers that may need to take additional actions related to Qualified Opportunity Funds (QOF).... Taxpayers who attached or indicated they attached a Form 8996 to their return may receive Letter 6250, Self-certifying as Qualified Opportunity Fund (QOF). This letter lets them know that if they intended to self-certify as a QOF they may need to take additional action to meet the annual self-certification requirement. To correct a 2018 self-certification as a QOF, these taxpayers should file an amended return or an administrative adjustment request (AAR). If an entity that receives the letter fails to take action to self-certify as a QOF, the IRS may refer its tax account for examination. Investors who made an election to defer tax on eligible gains invested in that entity may also be subject to examination for an invalid election. Additionally, taxpayers may receive Letter 6251, Reporting Qualified Opportunity Fund (QOF) Investments, notifying them they may not have properly followed the instructions for Form 8949, Sales and other Dispositions of Capital Assets or do not appear to have an eligible gain that would enable them to make a valid deferral election for gains invested in a QOF. If these taxpayers intended to make a valid deferral election, they can file an amended return or an AAR. Failure to act will mean those who received the letter may not have a qualifying investment in a QOF and the IRS may refer their tax accounts for examination. This may result in letter recipients owing taxes, interest, and penalties on gains that were not properly deferred. For general information, visit the Opportunity Zones page on irs.gov.

Identity Protection PIN Program will soon be available to taxpayers nationwide In January, the IRS Identity Protection PIN Opt-In Program will be expanded to all taxpayers who can properly verify their identity. An identity pretention PIN is a six-digit number assigned to eligible taxpayers to help prevent their Social Security number from being used to file fraudulent federal income tax returns. This number helps the IRS verify a taxpayer’s identity and accept their tax retu...Continue reading

Issue Taxpayers should file by July 15 tax deadline; automatic extension to Oct. 15 available IRS has easy ways to help taxpayers who need more time or payment options ...Continue reading

IRS warns people about a COVID-related text message scam The IRS and its Security Summit partners are warning people to be aware of a new text message scam. The thief’s goal is to trick people into revealing bank account information under the guise of receiving the $1,200 Economic Impact Payment. Here’s how this scam works... People get a text message saying they have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment Continue here to accept this payment " The text includes a link to a phishing web address. This fake link appears to come from a state agency or relief organization. It takes people to a fake website that looks like the IRS.gov Get My Payment website. If people visit the fake website and enter their personal and financial account information, the scammers collect it. Here’s what people should do if they receive this message Anyone who receives this scam text should take a screenshot and include the screenshot in an email to [email protected] with the following information: Date/time/time zone that they received the text message The phone number that received the text message The IRS doesn’t send unsolicited texts or emails. The agency will never demand immediate payment using a gift card, prepaid debit card or wire transfer or threaten to have a taxpayer arrested.

October 15th is fast approaching...make an appointment today.

RS offers settlement for syndicated conservation easements; letters being mailed to certain taxpayers with pending litigation WASHINGTON The Internal Revenue Service Office of Chief Counsel announced today a time-limited settlement offer to certain taxpayers with pending docketed Tax Court cases involving syndicated conservation easement transactions. Taxpayers eligible for this offer will be notified by letter with the applicable terms. The settlement offer would bring fin...Continue reading

Here’s what taxpayers need to know about the home office deduction The home office deduction allows qualifying taxpayers to deduct certain home expenses on their tax return. With more people working from home than ever before, some taxpayers may be wondering if they can claim a home office deduction when they file their 2020 tax return next year. Here are some things to help taxpayers understand the home office deduction and whether they can claim it:... Employees are not eligible to claim the home office deduction. The home office deduction Form 8829 is available to both homeowners and renters. There are certain expenses taxpayers can deduct. They include mortgage interest, insurance, utilities, repairs, maintenance, depreciation and rent. Taxpayers must meet specific requirements to claim home expenses as a deduction. Even then, the deductible amount of these types of expenses may be limited. The term "home" for purposes of this deduction: Includes a house, apartment, condominium, mobile home, boat or similar property. Also includes structures on the property. These are places like an unattached garage, studio, barn or greenhouse. Doesn’t include any part of the taxpayer’s property used exclusively as a hotel, motel, inn or similar business. There are two basic requirements for the taxpayer’s home to qualify as a deduction: There must be exclusive use of a portion of the home for conducting business on a regular basis. For example, a taxpayer who uses an extra room to run their business can take a home office deduction only for that extra room so long as it is used both regularly and exclusively in the business. The home must be the taxpayer’s principal place of business. A taxpayer can also meet this requirement if administrative or management activities are conducted at the home and there is no other location to perform these duties. Therefore, someone who conducts business outside of their home but also uses their home to conduct business may still qualify for a home office deduction. Expenses that relate to a separate structure not attached to the home will qualify for a home office deduction. It will qualify only if the structure is used exclusively and regularly for business. Taxpayers who qualify may choose one of two methods to calculate their home office expense deduction: The simplified option has a rate of $5 a square foot for business use of the home. The maximum size for this option is 300 square feet. The maximum deduction under this method is $1,500. When using the regular method, deductions for a home office are based on the percentage of the home devoted to business use. Taxpayers who use a whole room or part of a room for conducting their business need to figure out the percentage of the home used for business activities to deduct indirect expenses. Direct expenses are deducted in full. Share this tip on social media -- #IRSTaxTip: Here’s what taxpayers need to know about the home office deduction. https://go.usa.gov/xfP7x

Extensions can be filed... you will have until 10/15