Tax Preparer Assistant Memory

tax-preparer-assistant-memory · 30 facts · by uniqent · 0 installs

30 verified facts covering 2026 IRS filing deadlines, standard deductions, QBI and SE tax rules, penalty calculations, S-Corp election mechanics, tax software landscape, and data security requirements for US tax preparers.

finance

tax

accounting

cpa

compliance

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Primary federal income tax filing deadline is April 15 2026 for calendar-year individual taxpayers; taxes owed are due on this date even if a filing extension is requested

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Form-4868 grants an automatic 6-month extension moving the individual filing deadline to October 15 2026; it extends time to FILE but NOT time to PAY — unpaid taxes accrue failure-to-pay penalty from April 15 at 0.5% per month

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Form-1065 (partnerships) and Form-1120-S (S corporations) are due March 16 2026 — one month before individual returns; Form-7004 extends these to September 15 2026

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IRS opens the 2026 tax filing season January 26 2026; W-2 and 1099 issuance deadline for employers and payers is January 31 2026; late W-2s are the #1 cause of delayed return preparation

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Quarterly estimated tax payment deadlines for 2026: Q1 April 15, Q2 June 15, Q3 September 15, Q4 January 15 2027; required when expected tax owed exceeds $1,000 estimated-payments

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Estimated tax safe harbors (IRC §6654): pay 90% of current year tax liability OR 100% of prior year tax (110% if prior year AGI exceeded $150,000); meeting either safe harbor eliminates underpayment penalty regardless of tax owed at filing

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2026 standard deductions: $32,200 for Married Filing Jointly, $16,100 for Single/MFS, $24,150 for Head of Household; inflation-adjusted annually by IRS under Rev. Proc. procedures #2026

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Self-employment tax rate is 15.3% (12.4% Social-Security + 2.9% Medicare) on net SE income up to the Social Security wage base; self-employed individuals may deduct 50% of SE tax as an above-the-line adjustment on Form 1040 Schedule-SE

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QBI-Deduction (IRC §199A): eligible pass-through business owners may deduct up to 20% of qualified business income; W-2 wage and UBIA property limitations apply above $197,300 (single) / $394,600 (MFJ) thresholds for specified service trades or businesses

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Home office simplified method (IRC §280A): $5/sq ft, max 300 sq ft, maximum $1,500 deduction; avoids depreciation recapture risk on sale; regular method uses Form-8829 with actual expenses but requires tracking and recapture

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Section-179 expensing allows immediate deduction of qualifying business property placed in service; 2025 limit is $1,220,000 with phase-out beginning at $3,050,000 of total property acquisitions

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Failure-to-file penalty: 5% of unpaid tax per month (or part of month), maximum 25%; if more than 60 days late, minimum penalty is the lesser of $525 or 100% of the tax owed IRS-penalty

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Failure-to-pay penalty: 0.5% of unpaid tax per month, maximum 25%; when both failure-to-file and failure-to-pay apply simultaneously, the failure-to-file rate is reduced by the failure-to-pay rate (net 4.5%/month combined maximum)

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First-Time-Abatement (FTA): IRS will abate one year of failure-to-file, failure-to-pay, or failure-to-deposit penalties for taxpayers with clean compliance history in the prior 3 years; request by phone (IRS 800-829-1040) or written response to a CP notice

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SALT (State and Local Tax) deduction cap temporarily increased to $40,000 through 2029 under recent 2025 legislation, up from the $10,000 cap established by TCJA; applies to state income and property taxes on Schedule-A

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Child Tax Credit increased to $2,200 per qualifying child under the One Big Beautiful Bill signed in 2025; partially refundable; phase-out begins at $400,000 MFJ / $200,000 single child-tax-credit

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Qualified Tips Deduction: service workers (servers, bartenders, rideshare drivers, salon staff) may deduct up to $25,000 in qualifying tips annually from 2025 through 2028 — new provision, verify client eligibility at intake #2026

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SALT senior deduction: taxpayers age 65+ receive an additional deduction of up to $6,000 on top of the standard deduction for seniors — new for 2026, confirm client age and filing status #2026

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Drake-Tax incorporates AI-driven W-2, 1099, and K-1 data extraction via secure client upload with automatic field population; widely used by independent and mid-size CPA firms; reported to boost firm productivity approximately 35%

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ProSeries (Intuit) is form-based Windows desktop software for small/medium firms; Lacerte (Intuit) provides advanced diagnostics for complex returns; UltraTax-CS (Thomson Reuters) integrates with the full CS Suite for enterprise-level firms

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CCH-Axcess-Tax (Wolters Kluwer) is a cloud-based SaaS platform supporting individual, partnership, corporate, and multi-state filings with AI computer vision and ML for data entry automation

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E-filing mandate: paid preparers who file 11 or more individual federal returns per calendar year must e-file all returns; requires an active EFIN (Electronic Filing Identification Number) — EFIN application process takes up to 45 days

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Every paid preparer must hold a current PTIN (Preparer Tax Identification Number) issued by the IRS; the EFIN is the firm-level e-filing identifier; both are required and must be separately maintained

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S-Corp reasonable compensation requirement: shareholder-employees must receive W-2 salary commensurate with services rendered before taking distributions; distributions above salary are not subject to self-employment tax — this is the core S-Corp tax benefit Form-1120-S

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S-Corp election mechanics: Form-2553 must be filed by March 15 of the election year (or within 75 days of entity formation); late elections may qualify for relief under Rev. Proc. 2013-30 if the entity meets the reasonable cause standard

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Multi-state nexus: businesses establish tax filing obligations in a state when they have sufficient connection (sales, employees, payroll, or property); most states are shifting to single-sales-factor apportionment; nexus analysis should precede any state return determination

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IRS-Publication-4557 (updated January 2026) requires every paid tax preparer to implement a Written Information Security Plan (WISP) documenting how taxpayer data is collected, stored, accessed, and destroyed; failure creates FTC Safeguards Rule exposure at $50,000 per violation

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IRS Security Summit reported 370+ data breach incidents affecting tax professionals in 2025, compromising approximately 458,000 client records; average cost per breached record in financial services was $374; AES-256 encryption at rest and TLS 1.2+ in transit are now baseline requirements

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Tax preparation busy season: January-April is the primary season (55-70 hours/week typical; 80-hour weeks in the 2 weeks before April 15 at larger firms); September-October is a secondary season for extension filers — capacity planning must account for both peaks

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Engagement-Letter best practice: issue fresh engagement letters annually including §7216 disclosure consent for sharing taxpayer data, scope of services, fees, and WISP security plan reference; annual re-issue limits preparer liability and documents scope changes

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