Candace Jones With Performance Tax Group

Did you know the official date to start e-filing is Monday Jan.24th. The IRS will be accepting 2019-2021 tax returns.

📍2021 Mileage Rate Changes

📌Starting on Jan. 1, 2021, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

📌- 56 cents per mile of business travel driven, a decrease of 1.5 cents from the rate for 2020.

📌- 16 cents per mile driven for medical or moving purposes (for qualified active duty members of the Armed Forces), a decrease of 1 cent from the rate for 2020.

📌- 14 cents per mile driven in service of charitable organizations, remaining unchanged from 2020.

You may also have the option of calculating the actual costs of using your vehicle rather than using the standard mileage rates.

⚠️It’s COLD OUTSIDE during the PANDEMIC⚠️
If you don’t want to come out in the cold or have to sit in the tax office this season, YOU DON’T HAVE TO!!! DOWNLOAD OUR APP and NEVER STEP FOOT IN THE OFFICE! Take pictures of your documents, put them in our secure portal and we will have those taxes completed for you! 💪🏾💪🏾💪🏾 Sign and Send from the app!!! 💥Boom💥 It’s THAT SIMPLE!!!!

📍Tax Filing Season Start - Did You Know?

📌The IRS has announced that the individual tax filing season will start on Friday, February 12, 2021 and the current deadline to file 2020 tax returns and pay any taxes owed is Thursday, April 15, 2021.

🔑 Although the IRS systems open for processing on February 12, you do not have to wait until then to begin preparing for your tax return.

📍IRS & Treasury Delivering Second Round of Stimulus Payments – Did You Know⁉️

📌Under the Coronavirus Response and Relief Supplemental Appropriations Act, the federal government has authorized a second round of 2020-2021 Economic Impact Payments (EIPs, also called stimulus payments) for many Americans. The IRS has already begun sending these new EIPs by direct deposit and mailed checks.

📌In most cases, individuals with an adjusted gross income (AGI) of $75,000 or below will receive a new EIP of $600. Joint filers with a combined AGI of $150,000 or less will generally get $600 apiece. In addition, many households may receive additional payments of $600 per qualifying child. Those with higher incomes may receive a smaller EIP or no payment at all.

‼️Note that dependents age 17 or older are not eligible for EIPs.

📌The vast majority of eligible Americans, including everyone who received a previous 2020 EIP, should receive these new stimulus payments automatically. There is no need to call the IRS or your bank. Simply watch for a direct deposit to your bank account, an IRS check in the mail or, in some cases, a prepaid debit card in a white envelope bearing an official U.S. Treasury seal.

📌For various reasons, some people who qualify for these EIPs may not receive automatic payments. If you believe you are entitled to a payment but do not receive one, a tax professional may help you claim the amount you are owed as a credit on your 2020 tax return.

Paying Estimated Tax to Avoid Penalties – Did You Know?

With more and more people deriving income from a variety of sources, including side jobs, self-employment and “gig economy” work, the IRS has reported a substantial increase in the number of Americans who underpay federal income tax during the year. Underpayment can lead to an unpleasant spring tax surprise, including substantial penalties and interest charges.

If a significant portion of your income is not subject to paycheck withholding, you may need to make quarterly estimated tax payments to avoid incurring an Estimated Tax Penalty for 2020. Common income types that may necessitate making estimated tax payments include:

- Business income, which includes rental income, as well as income from self-employment and “gig economy” work (working for a rideshare service, mowing lawns, etc.)
- Royalties and grants, including grants in support of artistic or educational endeavors
- Interest, dividend and alimony payments
- Unemployment Insurance (UI) and Social Security benefits

It is critical for those who have received UI benefits in 2020 to learn whether they must make estimated tax payments before the year ends. Many state unemployment agencies have not withheld taxes from the federal $600-per-week federal UI benefit that was paid under the CARES Act from late March through July, or from the temporary $300 weekly federal UI payment recently implemented by Executive Order. Therefore, even those who had tax withheld from their UI benefits may not have paid enough in federal taxes to avoid penalties.

The IRS encourages Americans who have received any form of non-employee income in 2020 to do a midyear tax checkup, and begin making estimated tax payments immediately if necessary. The third-quarter estimated tax payment deadline was September 15, 2020, but those who missed the deadline can minimize penalties by making a payment as soon as possible. Fourth-quarter estimated tax payments are due January 15, 2021, although taxpayers may generally skip the fourth-quarter payment if they file a 2020 return and pay all tax due by February 1, 2021.

In most cases, taxpayers will avoid 2020 tax penalties if their paycheck withholding and/or estimated tax payments for the year add up to at least 90% of their 2020 tax, or 100% of their 2019 tax, whichever is lower. A tax professional can help you determine whether you need to make estimated tax payments this year, along with when and how much to pay.

IRS online payment portal: https://www.irs.gov/payments

📍Tracking Income and Expenses for “Gig” Work – Did You Know?

📌With working from home becoming more common in 2020, many people are taking on freelance or “gig” work to supplement their incomes. Whether you rely on gig work as your primary income source or just log a few hours a week, it is important to track all your freelance income, along with any associated expenses. Freelance income must be reported to the IRS, but deductions for a home office and expenses like supplies and mileage may reduce your tax liability.

📌If you have multiple income sources, including an hourly or salaried job, you may need to adjust your withholding to account for your freelance work. The IRS offers a free Withholding Estimator tool to help you determine whether your current withholding is sufficient. If most or all of your work is on a freelance basis, you may need to make quarterly estimated tax payments.

📌A tax professional can help you develop an efficient system to record your income and expenses, and keep your withholding or estimated tax payments on track. It is much easier to track these numbers on an ongoing basis than to reconstruct them at the end of the year.

IRS Withholding Estimator: https://www.irs.gov/individuals/tax-withholding-estimator.

‼️New mileage rates for 2020‼️

IRS issues standard mileage rates for 2020 | Internal Revenue Service IR-2019-215, December 31, 2019 — The Internal Revenue Service today issued the 2020 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.