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[09/17/21] The IRS continues to allow taxpayers who do not itemize deductions, to deduct up to $300 in cash charitable contributions. For the current 2021 tax year, Married couples filing jointly can deduct up to $600 in cash contributions. Cash including check, credit or debit card.
The IRS has extended some due dates in a number of places as a result of Hurricane IDA. Taxes and returns that are due after September 1, including the September 15th and October 15th deadlines are automatically extended until Jan 3, 2022.
The locations include the 5 Boroughs of New York, Westchester, and many New Jersey counties.
Many families are now getting Child Tax Credit payments monthly. You can change that and stop all payments until you file your 2021 return.
Even after payments begin, families can stop all future monthly payments if they choose. They do that by using the unenroll feature in the Child Tax Credit Update Portal. Eligible families who make this choice will still receive the rest of their Child Tax Credit as a lump sum when they file their 2021 federal income tax return next year.
To stop all payments starting in September and the rest of 2021, they must unenroll by Aug. 30, 2021. For more information about the unenrollment process, including a schedule of deadlines for each monthly payment, see Topic J of the Child Tax Credit FAQs on IRS.gov.
For married couples, each spouse must unenroll separately. If they each choose to unenroll, they will receive no monthly payments. If only one spouse unenrolls, the other spouse will still receive monthly payments, but they will be half the normal amount.
[07/28/21] The IRS has been slowly sending out the 2020 refunds, well after the returns were filed, testing many taxpayers patience. They have been adding interest to those refunds but don't forget that any interest income that's added to your refund will be taxable in 2021.
[07/14/21] If you filed your 2020 return prior to the American Rescue Plan which was signed this past March, and had up to $10,200 in Unemployment Insurance of which you paid tax on, you will now be getting refunds for the Federal Tax you paid. The refunds have been going out for a week or two now and will continue to be issued until everyone gets what they are entitled to.
The IRS is beginning to issue refunds to early filers who paid tax on the full amount of unemployment insurance. The American Rescue Plan of 2021 later exempted the first $10,200.
The refunds will come as direct deposits for those who had provided bank account information with their return. The rest will be sent by check. A follow up explanation letter will be issued within 30 days.
To help taxpayers, the Internal Revenue Service announced today that it will take steps to automatically refund money this spring and summer to people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan.
The legislation, signed on March 11, allows taxpayers who earned less than $150,000 in modified adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly and $10,200 for all other eligible taxpayers. The legislation excludes only 2020 unemployment benefits from taxes.
Because the change occurred after some people filed their taxes, the IRS will take steps in the spring and summer to make the appropriate change to their return, which may result in a refund. The first refunds are expected to be made in May and will continue into the summer.
For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.
There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.
The IRS today, announced that they have extended other individual deadlines to match the filing deadline of May 17th.
Individuals now have until May 17th, to make contributions to an IRA or a health savings account.
The Internal Revenue Service issued Announcement 2021-7 today clarifying that the purchase of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses.
The amounts paid for personal protective equipment are also eligible to be paid or reimbursed under health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs), or health savings accounts (HSAs).
What are the tax year 2021 changes for the child tax credit?
For tax year 2021, the entire child tax credit will be refundable, and its amount will depend on the age of each qualifying child:
Up to $3,600 for each qualifying child younger than 6
Up to $3,000 for each qualifying child younger than 18
Previously, the child tax credit was worth up to $2,000 for qualifying children younger than 17 years, and only $1,400 of the credit was refundable.
Returns filed with unemployment benefits prior to the $10,200 exclusion should not be amended. The IRS has indicated it will refigure taxes on these returns and adjust the taxpayer's account accordingly. The IRS will then send any refund amount directly to the taxpayer.
The IRS has not yet communicated a timeline for making adjustments and sending refunds.
We are still awaiting on whether NY State will conform to the federal exclusion of $10,200 in unemployment insurance or their willingness to refigure taxes and adjust the accounts on their own.
The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov. The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time.
The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance.
The IRS has just announced that they will not begin processing returns until February 12th. That is due to programming updates as some new laws were signed into place on December 27. Returns can be transmitted to the IRS anytime prior to that date.
Taxpayers with Earned Income Credit will not start getting refunds until the first week of March at the earliest.
About 8 million second Economic Impact Payments are going out by Prepaid Debit Cards this week. If you haven't received a direct deposit or a paper check, look to the mail for your Prepaid Debit Card.
If you got a paper check last time, you may get a prepaid debit card this time, or visa versa. The cards will come in a white envelope with the US Department of Treasury seal.
For more information on the prepaid debit cards use this link: https://www.eipcard.com/
eipcard.com Your Economic Impact Payment (EIP) Card contains the money you are receiving as a result of the CARES Act. Here’s how to activate and start using it.
Stimulus payments have been reaching many taxpayers bank accounts the past few days and checks are starting to go out.
You are now able to check the status of the stimulus payment by using this link; https://www.irs.gov/coronavirus/get-my-payment
irs.gov Use Get My Payment to get information about your payment status and payment type.
As many companies are now preparing to apply or are applying for PPP forgiveness regarding their first loan, companies should start gathering information to apply for the new loans that will be distributed.
There will be more requirements to apply this time and although some lenders may differ, this is some of the information to put together;
* Photo ID for 20% or more owners
* 2019 & 2020 P&L statements to show revenue loss
* 2019 Business tax returns
* Articles of incorporation/organization
* Payroll reports for all 12 months of 2020
* Quarterly forms 941. W-3 and 940 as well.
* Documentation to support Health Insurance incurred as part of payroll expenses.
Some of this may not be available for a few weeks still, but this is the time to start compiling.
Happy New Year to everyone.
Today, the Internal Revenue Service and the Treasury Department began delivering a second round of Stimulus payments. Some may even see it in their bank accounts later today. Paper checks will start to go out tomorrow, December 31st.
The payments will be $600 for single individuals and $1,200 for married couples. In addition there will be $600 for each qualifying child up to 16 years of age.
Filers with adjusted gross income of up to $75,000 single and $150,000 married, will receive the full benefit. Filers with income above those amounts will get reduced payments.
The IRS will use the information from your 2019 return.
There is a new special 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.
This is an above the line deduction for those who don't itemize.
There is a new Covid Scam The scam text message states: “You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required to accept this payment into your account. Continue here to accept this payment …” The text includes a link to a fake phishing web address.
Funds being directly deposited do NOT need your banking information, they have it already.
People who receive this text scam should take a screen shot of the text message that they received and then include the screenshot in an email to [email protected]
Where can I find the simpler PPP loan forgiveness application?
Treasury includes links to the new form and its instructions:
Simpler Loan Application
Instructions for simpler loan forgiveness application https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-3508S-Instructions.pdf
In addition to helping businesses more easily apply for loan forgiveness, Treasury says, “SBA and Treasury have also eased the burden on PPP lenders, allowing lenders to process forgiveness more swiftly.”
Contributions to a traditional IRA for 2020, may not be deductible if a taxpayer is covered by a retirement plan. The phase outs begin as follows: Single $66,000, Married filing Jointly $105,000, a Spouse that is not covered $198,000.
For people who are not covered by a pension plan, there is no phase out of the deduction.
[10/22/20] People who don’t typically file a tax return – and haven’t received an Economic Impact Payment – should register as quickly as possible using the Non-Filers: Enter Info Here tool on IRS.gov. The tool will not be available after Nov. 21.
[10/08/20] Just a reminder that October 15th is the final deadline for 2019 income tax returns to avoid penalties. That's one week from today.
The Internal Revenue Service today released a state-by-state breakdown of the roughly nine million people receiving a special mailing this month encouraging them to see if they’re eligible to claim an Economic Impact Payment.
The IRS will mail the letters to people who typically aren’t required to file federal income tax returns but may qualify for an Economic Impact Payment. The letter urges recipients to visit the special Non-Filers: Enter Payment Info tool on IRS.gov before the Oct. 15 deadline to register for an Economic Impact Payment.
The Internal Revenue Service will be sending interest payments to taxpayers who have timely filed, by July 15, 2020, their 2019 income tax returns and are receiving refunds.
The interest payments will be issued separately from the refunds. If taxpayers had their refunds directly deposited, the interest payments will also be directly deposited. Everyone else will receive a check.
On a side note, these interest payments will be taxable on your 2020 returns.
Warren A Frank, CPA
[06/30/20] A reminder for those who haven't filed a return for 2019. After many months, the deadline is approaching quickly. Returns are due to be filed on Wednesday July 15th. If you can't file by that date, you can get an extension for 3 months until October 15th.
Just a reminder that July 15th is the filing deadline for returns that normally would have been due to be filed by April 15th. The July 15th date also includes first and second quarter estimated taxes for 2020.
If you can't file your return by July 15th, you can get an extension until October 15th. All corporate/partnership returns currently on extension are still due September 15th.
With a variety of steps underway to speed Economic Impact Payments, the Treasury Department and the Internal Revenue Service urged people to use Get My Payment by noon Wednesday, May 13, for a chance to get a quicker delivery.
After noon Wednesday, the IRS will begin preparing millions of files to send paper checks that will begin arriving through late May and into June.
[04/26/20] The Internal Revenue Service today announced significant enhancements to the “Get My Payment” tool to deliver an improved and smoother experience for Americans eligible to receive Economic Impact Payments. If you have not gotten your payment and were unclear with the previous IRS response, check again at IRS.gov.
[04/26/20] I just got a message from "IRS.Office" with the subject "Relief Package", with an item to be opened. Be aware, the IRS will never send you an email. Delete these emails immediately. It's a scam and will corrupt your computer.
The IRS said today, that Economic Impact Payments will be distributed automatically to most people starting next week.
To help everyone check on the status of their payments, the IRS is building a second new tool expected to be available for use by April 17. Get My Payment will provide people with the status of their payment and allow eligible people the ability to update their direct deposit information.
There is a new link for people who can get the economic impact payments for people who don't file income tax returns. Here is the link https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here
irs.gov Steps to receive the Economic Impact Payment if you haven't filed a tax return for 2018 or 2019, and aren't receiving Social Security, SS Disability Income or Railroad Retirement benefits. This payment is also referred to as "stimulus checks" or "coronavirus relief."
Disaster loan assistance is available for most businesses. That includes whether you are Self Employed, have an LLC or an S Corporation. Follow this link. https://covid19relief.sba.gov/#/
[04/02/20] In a reversal of previous direction, the IRS just stated that people who normally don't file an income tax return because most of their income is Social Security, will NOT have to file an income tax return in order for them to get an economic stimulus check.
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