Showing posts from January, 2021

Evidence of Scams Comes to Light

Criminals continue adapting their scams to take advantage on any given situation. We see many examples all around us. Please continue to stay vigilant and watch for signs that you may have become a victim. This evidence can come to light now as different tax forms are being mailed. For example, there were record numbers of Taxpayers who claimed Unemployment this past year. They would be sent a tax form for that income. If you did not file for Unemployment and received that form, you may have been the victim of fraud. This has been a new area of crime growth across the country. Different states will have their own ways to report these incidents. There are some basic ways to protect yourself.           Never give away your personal information through electronic messaging. Real companies and government agencies will not communicate with you in these ways. If you did not apply for Unemployment benefits, and someone claiming to work for the state agency calls you asking for them, do

Always Check Your Withholding

       How has 2021 been for you so far? After going through 2020, you can probably handle anything. We all learned a lot, and the best thing to do is to put that knowledge into practice. Making sure that your Tax Withholding is correct will give you one less thing to worry about this year.      If your family situation has changed, it would be good to fill out a new Form W-4 and give it to your employer. This will help to make sure that the proper amount of taxes are withheld from your wages and avoid a tax surprise next year. While receiving Unemployment Benefits, you can choose to have taxes withheld from that income source as well. As your tax documents arrive this month, you will see where adjustments need to be made for this year. If you need guidance on the path to take for this year, reach out to your Qualified Tax Professional .

Identity Protection Now Available to All Taxpayers

          A program that was once only open to those who were confirmed to have been victims of Identity Theft has now been opened to all taxpayers. The Identity Protection PIN ( IP PIN ) is a six digit code known only to the taxpayer and the Internal Revenue Service ( IRS ). It prevents thieves from filing false Tax Returns using a victim’s personal information. The expansion of this program is certainly an acknowledgment of how pervasive the danger of Identity Theft continues to be. This is a voluntary program. If you choose to join, you must go through a detailed process to verify who you are. This PIN must be entered on all electronic and paper documents to avoid rejection or returns. The IRS will never call, text, or email you and ask for your PIN . There is currently no opt-out for this program, but one may be provided in the future. Those who are already in the program will experience no change.

More Economic Impact Payments are Being sent as Cards

     The second round of Economic Impact Payments ( EIP ) are being sent out by the Internal Revenue Service ( IRS ) as fast as possible. To speed up the delivery, many will receive these funds as a debit card in the mail. The IRS does not make the determination of who receives a card, and your particular form of payment might be different from the last time. They are being sent to all 50 states, so watch your mail if you qualify and have not received your EIP yet. It has been stated that Taxpayers in the Western US are more likely to be sent a card. The Get My Payment tool is useful to determine your EIP status.

The Date For Tax Filing Has Been Announced!

     The Internal Revenue Service ( IRS ) has announced the beginning of Tax Season for 2021. The day they will start to accept and process Tax Returns is Friday, February 12 . Does that date seem a little later than usual? Yes it is and there are reasons for that.      There were tax law changes that came into effect on December 27, 2020 that related to the second round of Economic Impact Payments. Some of these changes will allow those who did not receive a payment in 2020, to get a Recovery Rebate Credit when they file this year. Given that timing, the IRS needs to reprogram and test their systems to make sure they run as smooth as possible. This looks to be one of, if not the most, important Tax Filing seasons ever. To make sure you are prepared, take time now to talk to your Qualified Tax Professional .

Preparing for Your Tax Return in 2021

             At this point the Internal Revenue Service ( IRS ) has not released the date when it will start to accept Tax Returns. However, we do know about many of the changes coming this Tax Season. As a reflection of what happened in 2020, there are some different things to consider when filing in 2021.           Recovery Rebate Credit. This would apply to those who never received their Economic Impact Payment ( EIP ) in 2020, or what they got was less than what they qualified for. Refund Interest Payments. If you filed on time and got your Tax Refund after April 15, 2020 it was late, and the IRS paid interest for the delay in sending the refund. That interest is also income that must be declared. The appropriate form will be sent soon. Another point to keep in mind is that you should never depend on a Tax Refund to arrive at a particular time. It usually takes 3 weeks, but certain credit claims will extend the process to reduce the risk of fraud. So an amount of patience w

How Student Loans Can Help You at Tax Time

         There are over 48 million Americans with student loans, and the number increases every year. While the amount of student loan debt can be stressful, it often turns into a benefit when it comes time to file your taxes. Specifically, the amount of interest paid on the loan during the year.           This applies to any loan taken out for educational expenses, which might include tuition, books, or room and board. This might be a loan for yourself or a family member, but your name must be on the loan in order to claim the deduction. The loan provider will send out a form that clearly states the amount of interest paid during the year to make the deduction claim easier. However, when it comes to these types of situations, there are restrictions and limitations on the amount that can be deducted and who may qualify. Talk to your Qualified Tax Professional to determine if this savings is available to you.