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B&K Tax Service, 1000 Texas Street , Suite J, Fairfield, CA (2026)

02/19/2024

📣It's tax time! ⏳

We offer tax preparation for both personal and business returns, as well as audit assistance. We are available year round at reasonable rates. Se habla español! Contact us to schedule your appointment!

10/27/2022

Grandparents and others with eligible dependents shouldn’t miss out on the 2021 child tax credit

Grandparents, foster parents or people caring for siblings or other relatives should check their eligibility to receive the 2021 child tax credit. People who claim at least one child as their dependent may not realize they could be eligible to benefit from the child tax credit.

Eligible taxpayers who received advance child tax credit payments last year should file a 2021 tax return to receive the second half of the credit. Eligible taxpayers who did not receive advance child tax credit payments last year can claim the full credit by filing a 2021 tax return.

People should review the eligibility rules to make sure they still qualify for the credit. The Interactive Tax Assistant can help people who aren’t sure. Taxpayers who haven’t qualified in the past should also check because they may now be able to claim the credit. The only way to receive the credit is to file a 2021 federal tax return.

What is the child tax credit expansion?
The child tax credit expansion increased the amount of money families can receive per child and expanded who can receive the payments. The credit increased from $2,000 to $3,600 per child for children under the age of six, from $2,000 to $3,000 for children over the age of 6 and raised the age limit from 16 to 17 years old.

The child tax credit expansion applies to tax year 2021 only.

Who qualifies for the child tax credit?
Taxpayers can claim the credit for each qualifying child who has a Social Security number that is valid for employment in the United States and issued by the Social Security Administration before the due date of their tax return. This includes the filing extension if the taxpayer requested the extension by the tax return’s original due date.

To be a qualifying child for the 2021 tax year, the child must fit certain criteria.

What are the eligibility factors?
Individuals qualify for the full amount of the 2021 child tax credit for each qualifying child if they meet all eligibility factors and their annual income is not more than:

$150,000 if they’re married and filing a joint return, or if they’re filing as a qualifying widow or widower.
$112,500 if they’re filing as a head of household.
$75,000 if they’re a single filer or are married and filing a separate return.
Parents and guardians with higher incomes may be eligible to claim a partial credit.

IRS Free File available until November 17 to help more people receive credits
The IRS Free File program offers eligible taxpayers brand-name tax preparation software to use at no cost. It’s free for most individual filers who earned $73,000 or less in 2021. To help more people claim a variety of tax credits and benefits, Free File will remain open for an extra month this year, until November 17, 2022.

Taxpayers who earned more than $73,000 in 2021 and are comfortable preparing their own taxes can use Free File Fillable Forms. This electronic version of paper IRS tax forms is also used to file tax returns online.

More information:
2021 Child Tax Credit and Advance Child Tax Credit Payments Frequently Asked Questions

Share this tip on social media -- : Grandparents and others with eligible dependents shouldn’t miss out on the 2021 child tax credit.

COVID Tax Tip 2022-165, October 27, 2022 — Grandparents, foster parents or people caring for siblings or other relatives should check their eligibility to receive the 2021 child tax credit. People who claim at least one child as their dependent may not realize they could be eligible to benefit fro...

10/17/2022

Taxpayers should stay on top of taxes all year to avoid a surprise tax bill

The next tax season seems far away, but this is actually the perfect time for taxpayers to review their withholding and estimated tax payments. Because federal taxes are pay-as-you-go, it’s important for taxpayers to withhold enough from their paychecks or pay enough in estimated tax. If they don’t, they risk being charged a penalty.

Adjust tax withholding
For employees, withholding is the amount of federal income tax withheld from their paycheck. The amount of income tax an employer withholds from an employee’s regular pay depends on two things:

The amount they earn.
The information they give their employer on Form W–4.
All taxpayers should review their federal withholding each year to make sure they're not having too little or too much tax withheld.

Individuals can use the IRS Tax Withholding Estimator to help decide if they should make a change to their withholding. This online tool guides users, step-by-step, through the process of checking their withholding, and provides withholding recommendations to help aim for their desired refund amount when they file next year.

Taxpayers can check with their employer to update their withholding or submit a new Form W-4, Employee's Withholding Certificate.

Make estimated payments
Taxpayers may need to make quarterly estimated tax payments in a few situations:

If the amount of income tax withheld from a taxpayer's salary or pension isn’t enough.
If they receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards.
If they are self-employed.
Estimated tax payments are due from individual taxpayers on April 15, June 15, September 15 and January 17. The fastest and easiest way to make estimated tax payments is using Direct Pay or the Electronic Federal Tax Payment System. Taxpayers can visit IRS.gov for other payment options.

More information:
Pay as You Go, So You Won't Owe
Estimated Taxes
Form W-4, Employee's Withholding Certificate

Share this tip on social media -- : Taxpayers should stay on top of taxes all year to avoid a surprise tax bill. http://ow.ly/mr9I50L9CZv

Tax Tip 2022-158, October 17, 2022 — The next tax season seems far away, but this is actually the perfect time for taxpayers to review their withholding and estimated tax payments. Because federal taxes are pay-as-you-go, it’s important for taxpayers to withhold enough from their paychecks or pa...

09/26/2022

Five things people can find on IRS.gov - besides tax filing info

Many people know IRS.gov has the latest filing info and tax forms, but they may not be aware that it also has a wide range of other tax-related topics. Here are five things people can find on IRS.gov besides filing info.

1. Find the Taxpayer Bill of Rights. Each taxpayer has a set of fundamental rights when dealing with the IRS. It’s important for taxpayers to know their rights and the IRS’s obligation to protect them.

2. Learn how to apply for 501(c)(3) status. The requirements and process to apply for 501(c)(3) status can be a lot. The IRS’ webinars and resources help organizations apply for and maintain federal tax-exempt status.

3. Discover IRS tax volunteer opportunities. People can learn to prepare taxes and make a difference in their community at the same time by volunteering to prepare taxes free of charge with the Volunteer Income Tax Assistance or Tax Counseling for the Elderly programs.

4. Keep up with the latest tax scams. Knowing how identity thieves and fraudsters work is one way taxpayers can keep themselves safe.

5. Use the Interactive Tax Assistant. People can get personalized answers to tax questions with the Interactive Tax Assistant. This tool provides answers to many common tax law questions based on the taxpayer’s individual circumstances.

Share this tip on social media -- : Five things people can find on IRS.gov - besides tax filing info http://ow.ly/OiUw50KRFj1

Tax Tip 2022-147, September 26, 2022 — Many people know IRS.gov has the latest filing info and tax forms, but they may not be aware that it also has a wide range of other tax-related topics. Here are five things people can find on IRS.gov besides filing info.

09/13/2022

People who still haven’t filed a 2021 tax return should file electronically to avoid these common mistakes

Summer is winding down and the filing deadline for people who requested an extension is quickly approaching. Everyone who still needs to file a 2021 tax return should do so as soon as possible.

Don’t wait until the deadline to electronically file a complete - and accurate - return.
Extension filers have until Oct. 17 to file but filing electronically helps reduce processing time and correct errors. Mistakes on a tax return can also lead to longer processing time or cause the return to be rejected.

Filing electronically can help taxpayers avoid many mistakes. Tax software does the math, flags common errors and prompts taxpayers for missing information. It can also help eligible taxpayers claim overlooked credits and deductions.

Another way taxpayers can avoid mistakes is by using a reputable tax preparer, including certified public accountants, enrolled agents or other knowledgeable tax professionals.

Here are some of the most common errors taxpayers should avoid:

Missing or inaccurate Social Security numbers Each SSN on a tax return should appear exactly as printed on the Social Security card.
Misspelled names Likewise, a name listed on a tax return should match the name on that person's Social Security card.
Entering information inaccurately Taxpayers should carefully enter wages, dividends, bank interest, and other income received and reported on an information return. This includes any information needed to calculated credits and deductions. Using tax software should help prevent math errors, but individuals should always review their tax return for accuracy.
Incorrect filing status Some taxpayers choose the wrong filing status. The Interactive Tax Assistant on IRS.gov can help taxpayers choose the correct status, especially if more than one filing status applies. Tax software also helps prevent mistakes with filing status.
Math mistakes Math errors are some of the most common mistakes. They range from simple addition and subtraction errors to more complex calculation mistakes. Taxpayers should always double check their math.
Figuring credits or deductions Taxpayers can make mistakes figuring things like their earned income tax credit, child and dependent care credit, child tax credit, and recovery rebate credit. The Interactive Tax Assistant can help determine if a taxpayer is eligible for tax credits or deductions. Tax software will calculate these credits and deductions and include any required forms and schedules. Taxpayers should double check where items appear on the final return before clicking the submit button.
Incorrect bank account numbers Taxpayers who are due a refund should choose direct deposit. This is the fastest way for a taxpayer to get their money. However, taxpayers need to make sure they use the correct routing and account numbers on their tax return.
Unsigned forms An unsigned tax return isn't valid. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have a valid power of attorney. Taxpayers can avoid this error by filing their return electronically and digitally signing it before sending it to the IRS.
Taxpayers who file electronically and choose direct deposit get their refund faster. IRS Free File offers online tax preparation, direct deposit of refunds, and electronic filing—all for free to qualified individuals. Some options are available in Spanish. Many taxpayers also qualify for free tax return preparation from IRS-certified volunteers.

Share this tip on social media -- : People who still haven’t filed a 2021 tax return should file electronically to avoid these common mistakes. http://ow.ly/e48G50KCAEO

COVID Tax Tip 2022-140, September 13, 2022 — Summer is winding down and the filing deadline for people who requested an extension is quickly approaching. Everyone who still needs to file a 2021 tax return should do so as soon as possible.

09/08/2022

Know what’s deductible after buying that first home, sweet home

Making the dream of owning a home a reality is a big step for many people. Whether a fixer-upper or dream home, homeownership is a milestone that can come with a learning curve. First-time homeowners should make themselves familiar with authorized deductions, programs that can assist with home ownership and the use of housing allowances that can be beneficial.

When it comes to home ownership, the IRS considers a home to be a house, condominium, cooperative apartment, mobile home, houseboat or house trailer that contains a sleeping space, toilet and cooking facilities.

Most home buyers take out a mortgage loan to buy their home and then make monthly payments to the mortgage holder. This payment may include several costs of owning a home. The only costs the homeowner can deduct are:

state and local real estate taxes, subject to the $10,000 limit
home mortgage interest, within the allowed limits
mortgage insurance premiums
Taxpayers must file Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Income Tax Return for Seniors, and itemize their deductions to deduct home ownership expenses. However, taxpayers can’t take the standard deduction if they itemize.

Non-deductible payments and expenses
Homeowners can’t deduct any of the following items.

Insurance, other than mortgage insurance, including fire and comprehensive coverage, and title insurance
The amount applied to reduce the principal of the mortgage
Wages you pay for domestic help
Depreciation
The cost of utilities, such as gas, electricity, or water
Most settlement or closing costs
Forfeited deposits, down payments, or earnest money
Internet or Wi-Fi system or service
Homeowners’ association fees, condominium association fees, or common charges
Home repairs
Mortgage interest credit
The mortgage interest credit is meant to help individuals with lower income afford home ownership. Those who qualify can claim the credit each year for part of the home mortgage interest paid.

A homeowner may be eligible for the credit if they were issued a qualified Mortgage Credit Certificate from their state or local government. An MCC is issued only for a new mortgage for the purchase of a main home. The MCC will show the certificate credit rate the homeowner will use to figure their credit. It will also show the certified indebtedness amount and only the interest on that amount qualifies for the credit.

Homeowners Assistance Fund
The Homeowners Assistance Fund program provides financial assistance to eligible homeowners for paying certain expenses related to their principal residence to prevent mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services, and also displacements of homeowners experiencing financial hardship after January 21, 2020.

Minister's or military housing allowance
Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don’t have to reduce their deductions based on the allowance.

More information:
Publication 530, Tax Information for Homeowners
Publication 936, Home Mortgage Interest Deduction

Share this tip on social media -- : Know what’s deductible after buying that first home, sweet home.

Tax Tip 2022-138, September 8, 2022 — Making the dream of owning a home a reality is a big step for many people. Whether a fixer-upper or dream home, homeownership is a milestone that can come with a learning curve. First-time homeowners should make themselves familiar with authorized deductions, ...

09/07/2022

Help wanted? Businesses that are hiring should know about the work opportunity tax credit

Businesses hanging up their Help Wanted signs should be sure to check out the work opportunity tax credit. This credit encourages employers to hire workers certified as members of any of ten targeted groups facing barriers to employment. The credit has been extended through the end of 2025.

The 10 targeted groups are:

Temporary Assistance for Needy Families recipients
Qualified unemployed veterans, including disabled veterans
Formerly incarcerated individuals
Designated community residents living in Empowerment Zones or Rural Renewal Counties
Vocational rehabilitation referrals
Summer youth employees living in Empowerment Zones
Supplemental Nutrition Assistance Program recipients
Supplemental Security Income recipients
Long-term family assistance recipients
Long-term unemployment recipients
Certification requirement
To claim the credit, an employer must first get certification that an individual is a member of the targeted group. They do so by submitting IRS Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, to their state workforce agency within 28 days after the eligible worker begins work. Employers should not submit this form to the IRS. They should contact their state workforce agency with any questions about the processing of Form 8850.

Figuring and claiming the credit
Eligible businesses claim the work opportunity credit on their federal income tax return. It is generally based on wages paid to eligible workers during the first year of employment. After the employer receives Form 8850 certification, they figure the credit on Form 5884, Work Opportunity Credit, and then claim the credit on Form 3800, General Business Credit.

Special rule for tax-exempt organizations
A special rule allows tax-exempt organizations to claim the credit only for hiring qualified veterans who began work for the organization between 2020 and 2026. After the employer receives the Form 8850 certification, these organizations claim the credit against payroll taxes on Form 5884-C, Work Opportunity Credit for Qualified Tax Exempt Organizations.

Credit limitations on the credits
For a taxable business, the credit is limited to the business’ income tax liability. Any credit remaining above the income tax liability is subject to the normal carry-back and carry forward rules. For qualified tax-exempt organizations, the credit is limited to the amount of employer Social Security tax it owes on wages paid to qualifying employees.

Share this tip on social media -- : Help wanted? Businesses that are hiring should know about the work opportunity tax credit.

Tax Tip 2022-137, September 7, 2022 — Businesses hanging up their Help Wanted signs should be sure to check out the work opportunity tax credit This credit encourages employers to hire workers certified as members of any of ten targeted groups facing barriers to employment. The credit has been ext...

09/01/2022

Don’t be an easy mark: What every tax pro should know about identity theft

It can be a challenge to stay ahead of identity thieves. These criminals are tech and tax savvy, and they like to target tax pros. They can either trick or hack their way into tax professionals' computer systems to access client data. Even when tax pros think they have client data stored securely, lack of strong authentication can make this information vulnerable.

Thieves use stolen data to file fraudulent tax returns, which is more difficult for the IRS to detect because the fraudulent returns use real financial information. Other data thieves sell the basic tax preparer or taxpayer information on the web so other fraudsters can try filing fraudulent tax returns.

Luckily, there are some easy things tax pros can do to protect their clients:

Create a security plan. Under federal law, paid tax return preparers must have a data security plan. This plan protects the business and client information while also providing a blueprint for action in the event of a security breach. For many tax pros, knowing where to start when developing a written security plan presents challenges. There are resources available to assist like IRS Publication 4557, Safeguarding Taxpayer Data.
Encourage clients to apply for an Identity Protection PIN. The IRS now offers IP PINs to all taxpayers who can verify their identities online, on the phone with an IRS employee after filing a Form 15227, or in person. The IP PIN is a six-digit number that is known only to the taxpayer and the IRS. It helps prevent an identity thief from filing a fraudulent return in the taxpayer's name. Tax professionals cannot obtain an IP PIN for their clients. Clients must verify their identities to the IRS. The easiest way is at the Get an IP PIN tool on IRS.gov.
Avoid spear phishing scams. One of the most successful tactics identity thieves use against tax professionals is the spear phishing scam. Thieves take time to craft personalized emails to entice tax professionals to open a link embedded in the email or open an attachment. Tax pros have been especially vulnerable to spear phishing scams from thieves posing as potential clients. Thieves might carry on an email conversation with their target for several days before sending the email containing a link or attachment. The link or attachment may secretly download software onto tax pros' computers that will give the thieves remote access to the tax professionals' systems.
Know the tell-tale signs of identity theft. Many tax professionals who report data theft to the IRS also say that they were unaware of the signs that a theft had occurred. There are many signs that tax pros should watch for. These include multiple clients suddenly receiving IRS letters requesting confirmation that they filed a tax return deemed suspicious. Tax professionals may also see e-file acknowledgements for far more tax returns than they filed. In computer hacking scenarios, computer cursors may move seemingly on their own.
Help clients protect themselves whether working from home or traveling. With the continuation of work-from-home policies for many organizations, taxpayers are doing more and more electronically. Tax pros can help their clients protect themselves by sharing information on computer security. These cyber-smart tactics protect not only the tax professional, but their clients also.

More information:
Identity Theft Central

Share this tip on social media -- : Don’t be an easy mark: What every tax pro should know about identity theft. http://ow.ly/1JFx50KvS8f

Tax Tip 2022-135, September 1, 2022 — It can be a challenge to stay ahead of identity thieves. These criminals are tech and tax savvy, and they like to target tax pros. They can either trick or hack their way into tax professionals' computer systems to access client data.

08/31/2022

Parents can boost their back-to-school budget by claiming tax credits and refunds

Summer is slipping away and another school year is starting. As kids head back to the classroom, parents are ticking items off the school supply list. If they want to boost their back-to-school budgets, parents and guardians should make sure they aren’t missing out on their 2021 refunds and tax credits.

Many people don’t get their tax refund because they didn’t file a federal tax return. Some people choose not to file a tax return because they didn't earn enough money to be required to file. Generally, they won't receive a failure to file penalty if they are owed a refund – but they won’t receive their refund either.

A refund isn’t the only money people might be missing out on when they don’t file. If they’re eligible for tax credits, like the child tax credit and the earned income tax credit, they’re leaving that money on the table as well.

The child tax credit
The child tax credit helps families with qualifying children get a tax break. People may be able to claim the credit even if they don't normally file a tax return.

Taxpayers qualify for the full amount of the 2021 child tax credit for each qualifying child if they meet all eligibility factors and their annual income isn’t more than:

$150,000 if they’re married and filing a joint return, or if they’re filing as a qualifying widow or widower.
$112,500 if they’re filing as a head of household.
$75,000 if they’re a single filer or are married and filing a separate return.
Parents and guardians with higher incomes may be eligible to claim a partial credit. The Interactive Tax Assistant can help people check if they qualify.

The earned income tax credit
The earned income tax credit helps low- to moderate-income workers and families get a tax break. If someone qualifies, they can use the credit to reduce the taxes they owe – and maybe increase their refund.

Low- to moderate-income workers with qualifying children may be eligible to claim the earned income tax credit if certain qualifying rules apply to them. People may qualify for the EITC even if they can’t claim children on their tax return. Visit IRS.gov to learn how to claim the EITC without a qualifying child.

People who qualify for the EITC, may also qualify for other tax credits, including:

Child tax credit and the credit for other dependents
Child and dependent care credit
Education credits
Recovery rebate credit
More information:
Don’t Lose Your Refund by Not Filing
Earned Income Tax Credit
Child Tax Credit

Share this tip on social media -- : : Parents can boost their back-to-school budget by claiming tax credits and refunds. http://ow.ly/rb9U50KtuqM

COVID Tax Tip 2022-134, August 31, 2022 — Summer is slipping away and another school year is starting. As kids head back to the classroom, parents are ticking items off the school supply list. If they want to boost their back-to-school budgets, parents and guardians should make sure they aren’t ...

08/25/2022

Taxpayers: File when ready, don’t wait until October 17 to file a 2021 tax return

For people who requested an IRS extension to file, the October 17, 2022, deadline may seem far away, but it’s coming up fast. Taxpayers who haven’t filed, whether they requested an extension or not, should file a complete and accurate return as soon as possible. For people who have all their paperwork in hand, filing sooner and filing electronically could help them avoid possible processing delays later.

Here are some resources and information to help taxpayers avoid getting caught up in a last-minute filing rush.

Resources for people preparing their tax return

IRS.gov The IRS webpage has tools and resources to help taxpayers and answer FAQs.
Online Account Access individual account information to get info from the most recently filed tax return, including adjusted gross income, Economic Impact Payments and advance child tax credit payments.
Interactive Tax Assistant Taxpayers can enter their info to get answers for their specific tax situation. This tool can determine if an individual must file a tax return, their filing status, if they can claim a dependent, if an income type is taxable, and their eligibility to claim a credit or deduct certain expenses.
Tax professionals Tax pros can also help taxpayers prepare their tax returns. Authorized IRS e-file providers are qualified to prepare, transmit and process e-filed returns. Taxpayers should choose a tax preparer wisely. The IRS online directory can help people find a local tax pro.
Volunteer Income Tax Assistance program The IRS's VITA program offers free basic tax return preparation to people who generally make $58,000 or less and people with disabilities or limited English-speaking taxpayers. Most sites are only open during the filing season, but taxpayers can use the VITA Site Locator tool to see if there's a community-based site staffed by IRS-trained and certified volunteers still open near them.
Taxpayers can file electronically for the fastest turnaround.
E-filing is fast, accurate and secure. When taxpayers choose direct deposit, their refund goes directly into their bank account. The IRS processes most e-filed returns and issues direct deposit refunds in less than 21 days.

IRS Free File Eligible individuals can use the IRS Free File program to prepare and file their 2021 federal tax return for free. Taxpayers can choose the brand-name tax preparation software company that is best for them. Some companies even offer free state tax return preparation. Those who earned more than $73,000 have the option to use IRS Free File Fillable Forms.
MilTax online software MilTax online software is also available for members of the military and certain veterans, regardless of income. This software is offered through the Department of Defense.
Commercial software The software uses a question-and-answer format that makes doing taxes easier. The return is signed electronically and transmitted through IRS-approved electronic channels.
An extension to file a tax return is not an extension to pay taxes.
Taxpayers who owe taxes can review all payment options online. The IRS has options for people who can't pay their taxes, including applying for a payment plan on IRS.gov. Here are some other things to know:

Generally, there’s no penalty for not filing a return if due a refund, but there's also no statute of limitations for assessing and collecting taxes due if no return has been filed.
Interest is charged on any tax not paid by the April due date and will accrue until paid in full. Penalties will accrue for each month tax remains unpaid until maxed out at 25% of the unpaid tax.
Submitting a tax return and paying the amount owed as soon as possible can help taxpayers avoid further interest and penalties.
More information:
IRS encourages taxpayers with October filing extensions and others who still need to file
Do I Need to File a Tax Return
What to Do if You Haven't Filed Your Tax Return
Voice bot video
Self-service options

Share this tip on social media -- :Taxpayers: File when ready, don’t wait until October 17 to file a 2021 tax return. http://ow.ly/Kq6r50Kqgvo

COVID Tax Tip 2022-131, August 25, 2022 — For people who requested an IRS extension to file, the October 17, 2022, deadline may seem far away, but it’s coming up fast. Taxpayers who haven’t filed, whether they requested an extension or not, should file a complete and accurate return as soon as...

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