Anthony Sykes & Company

             After filing your tax return, you may have found that there is an error. Do you need to file an amended tax return? The Internal Revenue Service ( IRS ) provides some guidance on that. The original tax return must be processed before an amended one should be submitted.           The IRS is already overwhelmed with documents that it needs to process, and does not want anything unnecessary. They are making automatic adjustments for those who were reported all unemployment income before changes were made by the American Rescue Plan ( ARP ). It can take a few weeks before the refund is processed. Basic math errors can be corrected and are not reasons for an amended return.              However, there are definite situations when filing an amended return is needed. If income is entered incorrectly, deductions are taken incorrectly, or eligible tax credi...

             A known part of the American Rescue Plan ( ARP ) Act, which was enacted in March 2021, is that there would be an Advance Child Tax Credit. These are advance payments of what would be expected to be claimed on the 2021 tax return. However, things can become complicated when there is shared custody of the children.           How does the Internal Revenue Service ( IRS ) decide who gets these advance payments? The information is based off of the 2020 or 2019 tax returns. So the parent that claimed them in the most recent year will be the one who gets the tax credit. If they alternate years claiming the tax and the one who will claim it is not getting the payments, they should remove themselves from this program. This will allow the other parent to claim the credit in their 2021 tax return. The other parent may need to repay the IRS if they received advance payments. If changes need to be ma...

             The last day to file a California state personal income tax return on an extension is Friday, October 15. Anything after that will be considered late by the Franchise Tax Board ( FTB ). Filing on time will avoid penalties, and potentially allow you to qualify for Golden State Stimulus ( GSS ) payments. If you do not file income taxes for 2020, you cannot qualify.           If you have income of less than $75,000 for 2020, you can qualify for a GSS payment. In addition, the taxpayer cannot be claimed as a dependent and must be a resident of California when the payment is issued. They also must have spent at least half of 2020 in the state of California. If you have provided bank account information to the FTB , you can expect an electronic deposit. Otherwise, the payment will be sent by mail. It is estimated that half a million tax returns still need to be filed. If you have not done so a...