24hr News

Illinois and Kentucky Tornado Victims

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 07 Jan 2022 14:32:52 GMT

For Kentucky tornado victims, IRS extends 2021 tax-filing deadline, other deadlines to May 16

WASHINGTON – Victims of this month’s tornadoes in parts of Illinois and Tennessee will have until May 16, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced today. This is the same relief already provided to storm victims in Kentucky.

Following the recent disaster declaration issued by the Federal Emergency Management Agency (FEMA), the IRS is providing this relief to taxpayers affected by storms, tornadoes and flooding that took place starting on Dec. 10 in parts of Kentucky. Currently, relief is available to affected taxpayers who live or have a business in Caldwell, Fulton, Graves, Hopkins, Marshall, Muhlenberg, Taylor and Warren counties. But the IRS will provide the same relief to any other localities designated by FEMA in Kentucky or neighboring states. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting on Dec. 10. As a result, affected individuals and businesses will have until May 16 to file returns and pay any taxes that were originally due during this period. This includes 2021 individual income tax returns due on April 18, as well as various 2021 business returns normally due on March 15 and April 18. Among other things, this means that affected taxpayers will have until May 16 to make 2021 IRA contributions.

In addition, farmers who choose to forgo making estimated tax payments and normally file their returns by March 1 will now have until May 16, 2022 to file their 2021 return and pay any tax due.

The May 16 deadline also applies to quarterly estimated income tax payments due on Jan. 18 and April 18. Among other things, this means that individual taxpayers can skip making the fourth quarter estimated tax payment, normally due Jan. 18, 2022, and instead include it with the 2021 return they file, on or before May 16. In addition, the quarterly payroll and excise tax returns normally due on Jan. 31 and May 2, 2022 are also now due on May 16.

In addition, penalties on payroll and excise tax deposits due on or after Dec. 10 and before Dec. 27 will be abated as long as the deposits are made by Dec. 27, 2021.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for the additional time.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Therefore, taxpayers do not need to contact the agency to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2021 return normally filed next year), or the return for the prior year, 2020 in this instance. Be sure to write the FEMA declaration number – 4630DR − on any return claiming a loss. See Publication 547 for details.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA.

For information on disaster recovery, visit disasterassistance.gov .

To get started with your return, download our app here

Child Tax Credit/Economic Impact Payment Update

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 07 Jan 2022 14:24:39 GMT

IRS issues information letters to Advance Child Tax Credit recipients and recipients of the third round of Economic Impact Payments; taxpayers should hold onto letters to help the 2022 Filing Season experience

WASHINGTON — The Internal Revenue Service announced today that it will issue information letters to Advance Child Tax Credit recipients starting in December and to recipients of the third round of the Economic Impact Payments at the end of January. Using this information when preparing a tax return can reduce errors and delays in processing.

The IRS urged people receiving these letters to make sure they hold onto them to assist them in preparing their 2021 federal tax returns in 2022.

Watch for advance Child Tax Credit letter

To help taxpayers reconcile and receive all of the Child Tax Credits to which they are entitled, the IRS will send Letter 6419, 2021 advance CTC, starting late December, 2021 and continuing into January. The letter will include the total amount of advance Child Tax Credit payments taxpayers received in 2021 and the number of qualifying children used to calculate the advance payments. People should keep this and any other IRS letters about advance Child Tax Credit payments with their tax records.

Families who received advance payments will need to file a 2021 tax return and compare the advance Child Tax Credit payments they received in 2021 with the amount of the Child Tax Credit they can properly claim on their 2021 tax return.

The letter contains important information that can make preparing their tax returns easier. People who received the advance CTC payments can also check the amount of their payments by using the CTC Update Portal available on IRS.gov.

Eligible families who did not receive any advance Child Tax Credit payments can claim the full amount of the Child Tax Credit on their 2021 federal tax return, filed in 2022. This includes families who don't normally need to file a tax return.

Economic Impact Payment letter can help with the Recovery Rebate Credit

The IRS will begin issuing Letter 6475, Your Third Economic Impact Payment, to EIP recipients in late January. This letter will help Economic Impact Payment recipients determine if they are entitled to and should claim the Recovery Rebate Credit on their tax year 2021 tax returns that they file in 2022.

Letter 6475 only applies to the third round of Economic Impact Payments that was issued starting in March 2021 and continued through December 2021. The third round of Economic Impact Payments, including the “plus-up” payments, were advance payments of the 2021 Recovery Rebate Credit that would be claimed on a 2021 tax return. Plus-up payments were additional payments the IRS sent to people who received a third Economic Impact Payment based on a 2019 tax return or information received from SSA, RRB or VA; or to people who may be eligible for a larger amount based on their 2020 tax return.

Most eligible people already received the payments. However, people who are missing stimulus payments should review the information to determine their eligibility and whether they need to claim a Recovery Rebate Credit for tax year 2020 or 2021.

Like the advance CTC letter, the Economic Impact Payment letters include important information that can help people quickly and accurately file their tax return.

More information about the Advance Child Tax Credit, Economic Impact Payments and other COVID-19-related tax relief may be found at IRS.gov.

As the 2022 tax filing season approaches, the IRS urges people to make sure an accurate tax return and use electronic filing with direct deposit to avoid delays.

To get help with this and other tax needs, please start by downloading our app .

What Should I Bring To My Appointment?

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 07 Jan 2022 14:17:11 GMT

This is a subtitle for your new post

The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

Five Signs of Small Business Identity Theft, New Protection Methods

info@starkcountyconnections.com (Karnchea Barchue) — Fri, 07 Jan 2022 14:16:58 GMT

Small business identity theft is a big business. Just like individuals, businesses can be victims too. Thieves use a business’s information to file fake tax returns or get credit cards.

Identity thieves are more sophisticated than they used to be. They know the tax code and filing practices and how to get valuable data. The IRS has seen a sharp increase in fraudulent business tax forms. These include Forms 1120, 1120S and 1041, as well as Schedule K-1. These affect business, partnership, estate and trust filers.

Signs of Identity Theft

Business filers should be alert for signs of identity theft. They should contact the IRS if they experience any of these issues:

The IRS rejects an e-filed return saying it already has one with that identification number.

The IRS rejects an extension to file request saying it already has a return with that identification number.

The filer receives an unexpected tax transcript.

The filer receives an IRS notice that doesn’t relate to anything they submitted.

The filer doesn’t receive expected or routine mailings from the IRS.

New Procedures to Protect Businesses in 2018

The IRS, state tax agencies and software providers have ways to detect suspicious returns. However, some new measures can help validate returns in advance. The IRS and states are asking businesses and tax professionals to help verify if a tax return is legitimate. These procedures are new for 2018. Software for business tax returns will ask questions related to:

The person authorized to sign the return

Payment history

Parent company information

Past deductions

Filing history

How can I get my stimulus check 2021?

info@starkcountyconnections.com (Karnchea Barchue) — Sun, 17 Jan 2021 17:53:51 GMT

The IRS and the Treasury Department will begin sending out the second stimulus payments on December 30, 2020. Some of your clients may see a direct deposit as pending until the official payment date of January 4, 2021. However, they will not need to take any action to receive their payment.

How much can I expect to receive on my second stimulus check?

info@starkcountyconnections.com (Karnchea Barchue) — Sun, 17 Jan 2021 17:47:32 GMT

Individuals who make $75,000 or less can expect to receive $600 this time. That means that married couples filing jointly who make $150,000 or less will receive $1,200. Dependents under age 17 who meet the requirements for a qualifying dependent will also receive $600, meaning a family of four will receive $2,400. (See: Sec 6428A(a)(2) – Additional 2020 Recovery Rebates for Individuals)

2021 Tax Filing Season Begins February 12

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 16 Jan 2021 16:02:07 GMT

Tax Relief Credit/Recovery Rebate Credit

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 16 Jan 2021 15:56:57 GMT

How do I find the payment amount I received in 2020?

Notice 1444

Refer to your Notice 1444 for the payment amount you were issued, before any offsets, in 2020. You'll need to this information to determine the amount to include on the worksheet that will be included in the 2020 Instructions for Form 1040 and 1040-SR and when completing the Form 1040 or Form 1040-SR.

Who Qualifies for the Recovery Rebate Credit?

The Recovery Rebate Credit is figured like the 2020 Economic Impact Payment, except that the credit eligibility and the credit amount are based on the tax year 2020 information shown on the 2020 tax returns filed in 2021.

Generally, you are eligible to claim the Recovery Rebate Credit, if you were a U.S. citizen or U.S. resident alien in 2020, are not a dependent of another taxpayer for tax year 2020, and have a social security number valid for employment that is issued before the due date of your 2020 tax return (including extensions).

You can take the Recovery Rebate Credit for any recovery rebate amount that is more than the Economic Impact Payment you received in 2020 by completing line 30 of your 2020 Form 1040 or 1040-SR.

You do not need to complete information about the Recovery Rebate Credit on your 2020 Form 1040 or 1040-SR if either of the following apply:

You received $1,200 plus $500 for each qualifying child you had in 2020, or
You're filing a joint return for 2020 and, together, you and your spouse received $2,400 plus $500 for each qualifying child you had in 2020.

You may be able to claim the Recovery Rebate Credit if:

You are eligible but were not issued an Economic Impact Payment, or
Your Economic Impact Payment was less than $1,200 ($2,400 if married filing a joint return) plus $500 for each qualifying child you had in 2020.

You may visit irs.gov for additional information.

Look-Back Provision

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 16 Jan 2021 15:54:56 GMT

Look-Back Provision

The look-back provision includes a special temporary rule allowing lower-income individuals to use their earned income from the tax year 2019 to determine the earned income tax credit and the refundable portion of their child tax credit in the 2020 tax year.

If your 2019 earned income for EITC is higher than your 2020 earned income, you will be able to use the 2019 income. This is a new tax provision and is being implemented in tax programs now.

Expiring ITINs

info@starkcountyconnections.com (Karnchea Barchue) — Sat, 16 Jan 2021 15:49:39 GMT

Taxpayers with Expiring ITINs Should Submit Renewal Applications by Dec. 31

WASHINGTON— The Internal Revenue Service reminds taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) to submit their renewal applications as soon as possible. Failing to renew them by the end of the year will cause refund and processing delays in 2018.

The IRS mailed letters over the summer to more than 1 million taxpayers whose ITINs are set to expire at the end of the year – those with middle digits 70, 71, 72 or 80. In addition, any ITIN that has not been used on a federal tax return at least once in the last three consecutive years will also expire at the end of the year. Affected taxpayers who expect to file a tax return in 2018 must submit a renewal application by the deadline.

Who Should Renew an ITIN?

Taxpayers with ITINs set to expire at the end of the year and who need to file a tax return in 2018 must submit a renewal application. Others do not need to take any action.

ITINs with middle digits 70, 71, 72, or 80 (For example: 9NN-70-NNNN) need to be renewed if the taxpayer will have a filing requirement in 2018.
Taxpayers whose ITINs expired due to lack of use should only renew their ITIN if they will have a filing requirement in 2018.
Taxpayers who are eligible for, or who have, an SSN should not renew their ITIN, but should notify IRS both of their SSN and previous ITIN, so that their accounts can be merged.
Taxpayers whose ITINs have middle digits 78 or 79 that had already expired and were never renewed should renew their ITIN if they will have a filing requirement in 2018.

How to Renew an ITIN

To renew an ITIN, taxpayers must complete a Form W-7 and submit all required documentation. Although a Form W-7 is usually attached to the tax return, a taxpayer is not required to attach a federal tax return to their ITIN renewal application.

There are three ways to submit the W-7 application package:

Mail the Form W-7, along with original identification documents or copies certified by the issuing agency, to the IRS address listed on the Form W-7 instructions. The IRS will review the identification documents and return them within 60 days.
Taxpayers have the option to work with Certified Acceptance Agents (CAAs) authorized by the IRS to help them apply for an ITIN. CAAs can certify all identification documents for primary and secondary taxpayers and certify that an ITIN application is correct before submitting it to the IRS for processing. A CAA can also certify passports and birth certificates for dependents. This saves taxpayers from mailing original documents to the IRS.
In advance, taxpayers can call and make an appointment at a designated IRS Taxpayer Assistance Center instead of mailing original identification documents to the IRS. When making an appointment, be sure to indicate that this involves an ITIN renewal application.