Vicki McCall PC

01/26/2022

ECONOMIC IMPACT PAYMENTS RECEIVED IN 2021 ( Stimulus checks)
ADVANCE CHILD CREDIT PAYMENTS RECEIVED IN 2021
NEED THE LETTERS FROM IRS IN ORDER TO FILE TAXES

– Tax season officially began on Monday, Jan. 24. As you prepare to file your 2021 taxes, you’ll want to watch for two letters from the IRS to make sure you get the money you deserve.
This year, the IRS is mailing two letters – Letter 6419 and Letter 6475 – to qualifying Americans.
The first applies to the Child Tax Credit Payments. According to the IRS, Letter 6419 outlines the total amount of advance Child Tax Credit payments you received in 2021 and the number of qualifying children used to calculate the payments.
The other letter, Letter 6475, relates to the third stimulus payment and includes how much you received in stimulus money last year.
This includes any plus-up payments, which were additional payments the IRS sent to people who received a third stimulus check based on a 2019 tax return or information from the Social Security Administration, Railroad Retirement Board, or Veterans Affairs. Plus-up payments were also sent to people eligible for a larger amount based on their 2020 tax return, according to the IRS.
Letter 6475 applies only to the third Economic Impact Payment, which was issued in March and distributed throughout the year. You can use this letter to determine if you can claim the Recovery Rebate Credit on your return.

While most eligible Americans already received their payment, those who are missing theirs should claim the recovery rebate credit. Stimulus checks aren’t taxable but do need to be reported when you file your taxes.

Taxes need to be filed by April 18 this year.

01/06/2022

It is here already! Get ready to file for 2021:

Tax filing step 1: Gather all year-end income documents

As taxpayers are getting ready to file their taxes, the first thing they should do is gather their records. To avoid processing delays that may slow their refund, taxpayers should gather all year-end income documents before filing a 2021 tax return.

It's important for people to have all the necessary documents before starting to prepare their return. This helps them file a complete and accurate tax return. Here are some things taxpayers need to have before they begin doing their taxes.

• Social Security numbers of everyone listed on the tax return. Many taxpayers have these numbers memorized. Still, it's a good idea to have them on hand to double check that the numbers on the tax return are correct. An SSN with one number wrong or two numbers switched will cause processing delays.

• Bank account and routing numbers. People will need these for direct deposit refunds. Direct deposit is the fastest way for taxpayers to get their money and avoids a check getting lost, stolen or returned to IRS as undeliverable.

• Don't have a bank account? Learn how to open an account at an FDIC-Insured bank or through the National Credit Union Locator Tool. Veterans can access the Veterans Benefits Banking Program.

• Forms W-2 from employer(s).

• Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan.

• Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy.

• Form 1099-INT for interest received.

• Other income documents and records of virtual currency transactions.

• Forms 1095-A, Health Insurance Marketplace Statement. Taxpayers will need this form to reconcile advance payments or claim the premium tax credit.

• Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments.

• Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit.

Forms usually start arriving by mail or are available online from employers and financial institutions in January. Taxpayers should review them carefully. If any information shown on the forms is inaccurate, the taxpayer should contact the payer ASAP for a correction.

06/08/2021

:Here’s how taxpayers can pay the right amount of tax throughout the year.

Tax Tip 2021-81, June 8, 2021

04/14/2021

2021 Child Tax credits on target to advance to some taxpayers starting in July

For this year, families can receive a credit of $3,600 for each child under 6 and $3,000 for each one under age 18, up from the current credit of up to $2,000 per child under age 17. The enhanced portion of the credit will be available for single parents with annual incomes up to $75,000 and joint filers making up to $150,000 a year.

04/14/2021

Here’s how people can pay their federal taxes

The May 17 deadline for individuals to file and pay their federal income tax is fast approaching. While paying taxes is not optional, people do have options when it comes to how they pay taxes. The IRS offers a variety of ways to pay taxes.

Some taxpayers must make quarterly estimated tax payments throughout the year. This includes sole proprietors, partners, and S corporation shareholders who expect to owe $1,000 or more when they file. Individuals who participate in the gig economy might also have to make estimated payments. The deadline to pay estimated taxes remains April 15, 2021.

Here are five ways for people who need to pay their taxes. They can:

Pay when they e-file using their bank account, at no charge, using electronic funds withdrawal.
Use IRS Direct Pay which allows taxpayers to pay electronically directly from their checking or savings account for free. They can choose to receive email notifications about their payments when they pay this way. Taxpayers should watch out for email schemes. IRS Direct Pay sends emails only to users who request the service.
Pay using a payment processor by credit card, debit card or digital wallet options. Taxpayers can make these payments online, by phone or through the IRS2Go app.
Make a cash payment at more than 60,000 participating retail locations nationwide. To pay with cash, visit IRS.gov and follow the instructions.
Pay over time by applying for an online payment agreement. Once the IRS accepts an agreement, the taxpayers can make their payment in monthly installments.
Share this tip on social media -- :Here’s how people can pay their federal taxes. https://go.usa.gov/xH4zG

Tax Tip 2021-50, April 14, 2021

04/06/2021

: Here’s how the third Economic Impact Payment is different from earlier payments. https://go.usa.gov/xHx95

Back to Top

COVID Tax Tip 2021-44, April 6, 2021

03/16/2021

NEW CHANGES IN 2021 BE READY
The American Rescue Plan, the pandemic relief measure signed by President Biden, includes significant tax changes affecting, in some cases, 2020 as well as 2021 tax returns.

IMPORTANT for 2020:
If you already filed a return and had unemployment, you may need to amend it and get a tax refund. Under The American Rescue plan just passed 2021. As we wait for IRS to update, be sure to review your return to see if you need to amend it.
https://www.irs.gov/newsroom/irs-statement-american-rescue-plan-act-of-2021

The American Rescue Plan contains a new provision to exempt $10,200 of unemployment benefits received in 2020 from income taxes. The exclusion is retroactive, applying to unemployment insurance benefits received last year. It only applies to individuals with incomes below $150,000.
STUDENT LOANS:
Tax-Free Status for Student Loan Forgiveness. All types of student loan forgiveness will be tax-free through December 31, 2025. This includes the loan forgiveness after 20 or 25 years in an income-driven repayment plan, since most other forms of student loan forgiveness were already tax-free. It will also apply to future student loan forgiveness programs, such as President Biden’s proposal for $10,000 in student loan forgiveness per borrower.
Only borrowers who have been repaying their federal student loans in Income-Contingent Repayment (ICR) will qualify for forgiveness before the December 31, 2025 expiration of the tax-free status. Borrowers in ICR with just undergraduate loans may switch into the Revised Pay-As-You-Earn (REPAYE) repayment plan to qualify for loan forgiveness after 20 years instead of 25 years.
Tax-Free Employer provided Student Loan Payments. The Consolidated Appropriations Act of 2021, signed into law by then-President Donald Trump on Dec. 27, 2020, allows employer-provided student loan repayment as a tax-free benefit to employees for five additional years, extending CARES Act relief first made available in March 2020.
This means that through Dec. 31, 2025, employers can choose to make tax-exempt annual contributions of up to $5,250 per employee toward eligible education debt. The funds allocated for this student loan assistance do not count toward an employee's gross taxable income.

Here are a few things to keep in mind as you think about taxes for 2021 for individuals

Assistance to Individuals
Recovery Rebates
Provides a payment of $1,400 for a single taxpayer ($2,800 for joint filers), in addition to $1,400 per dependent. The credit phases out between $75,000 and $80,00 of adjusted gross income ($112,500 and $120,000 for head of household filers and $150,000 and $160,000 for joint filers). For purposes of this payment, a dependent includes both children and non-child dependents. Mixed-status households may receive payments for each individual with a valid identification number.
Child Tax Credit enhancements for 2021
Makes the child tax credit fully refundable for 2021 and increases the amount to $3,000 per child ($3,600 for a child under age 6). Increases the age of qualifying children by one year for 2021, such that 17-year-olds qualify for the credit. The credit begins to phase out for adjusted gross income in excess of $150,000 for joint filers ($112,500 for head of household filers and $75,000 for other filers).

The Child Tax Credit (CTC) would be expanded from $2,000 today to $3,000 for children 6 and older and $3,600 for children under 6. The credit would be advanced to families monthly, at $250/month for older children and $300/month for younger children. It would be fully available and refundable to households with no income, unlike the Child Tax Credit’s current design

“Childless” Earned Income Tax Credit strengthened and expanded
Reduces the minimum age to claim the childless EITC from 25 to 19 and eliminates the upper age limit. Increases the credit percentage from 7.65% to 15.3% and the income at which phaseout begins to $11,610 for non-joint filers. These changes increase the maximum credit amount from $543 to $1,502.
Child and Dependent Care Tax Credit enhancements for 2021
Makes the CDCTC fully refundable and increases the maximum credit rate to 50%. Amends the phaseout threshold to begin at $125,000 instead of $15,000. Increases the amount of child and dependent care expenses that are eligible for the credit to $8,000 for one qualifying individual and $16,000 for two or more qualifying individuals.

OTHER DEDUCTIONS
The “Taxpayer Certainty and Disaster Tax Relief Act of 2020” (the Act), enacted as part of the “Consolidated Appropriations Act, 2021” (CAA 2021), allows a full deduction for certain business meal expenses—an increase from the 50% deduction limit. The expenses must be paid or incurred during calendar year 2021 or 2022, and the relevant food and beverages provided by a restaurant. The Act itself does not specifically extend the full deduction to entertainment expenses. More guidance is needed from IRS and taxpayers are encouraged to check for updates at the IRS website www.irs.gov

Get My Payment Get Your Refund Status Get Coronavirus Tax Relief File Your Taxes for Free Get Your Tax Record View Your Account Make a Payment Get Answers to Your Tax Questions Forms and Instructions 1040 and Schedules 1-3 Individual Tax Return Other 1040 Schedules Information About the Other Schedu...

03/16/2021

The American Rescue Plan Act’s Small Business Assistance and Support
The American Rescue Plan Act provides additional relief for the nation’s small businesses and hard-hit industries for programs the SBA is currently administering and adds new efforts, including:
o $7.25 billion additional for the Paycheck Protection Program, including to expand eligibility to additional nonprofits and digital news services
o Additional funds are allocated for the Shuttered Venue Operators Grant program, and now allows businesses to apply for both a PPP loan after Dec. 27, 2020, and the SVOG
o $15 billion additional for Targeted Economic Injury Disaster Loan Advance (EIDL) payments, including NEW $5 billion for Supplemental Targeted EIDL Advance payments for those hardest hit
o NEW: $28.6 billion for the Restaurant Revitalization Fund for industry-focused grants
o NEW: $100 million to establish a Community Navigator pilot program; grants will go to eligible organizations supporting efforts to improve access to COVID–19 pandemic assistance programs and resources.
SBA’s current relief efforts can be found at www.sba.gov/coronavirusrelief

We’re here to help you overcome the challenges created by this health crisis. We offer multiple funding options for those seeking relief. Read more below.

10/27/2020

TODAYS TAX TIPS

1. Understand the impact of your stimulus check. The CARES Act directed the IRS to issue stimulus checks of up to $1,200 per taxpayer and $500 per qualified child dependent earlier this year. The payments were paid based on 2018 or 2019 return filed, but are actually structured as advances of 2020 tax credits. The credits phase out for higher income taxpayers, so you want to understand the implications if the check you received based on 2018 or 2019 won’t match the amount of credit you will calculate on the 2020 return. If the 2020 credit calculation is less than you received, there is no pay back required. If you received less than the credit calculated for 2020, you can claim it as an additional refund.
2. Make up a tax shortfall with increased withholding. COVID-19 created cash-flow problems for many individuals. Make sure your withholding and estimated taxes align with what you actually expect to pay while you have time to fix a problem. If you find yourself in danger of being penalized for underpaying taxes, you can make up the shortfall through increased withholding on your salary or bonuses. A larger estimated tax payment at the end of the year can still expose you to penalties for underpayments in previous quarters, but withholding is considered to have been paid ratably throughout the year, so increasing it for year-end wages can save you in penalties.
3. Use the above-the-line charitable deduction. Everyone is entitled to a charitable deduction this year. The TCJA doubled the standard deduction while repealing or limiting many itemized deductions, leaving millions fewer taxpayers claiming actual itemized deductions. Typically, there is no tax benefit for giving to charity unless you itemize deductions. However, for 2020,the CARES Act created an above-the-line deduction of up to $300 for cash contributions from taxpayers who don’t itemize. If you would like to take advantage of this provision, make sure to donate before the end of the year.

10/27/2020

Questions on PPP Loan forgiveness go to this site for some helpful information

Paycheck Protection Program (PPP) Frequently Asked Questions (FAQs) on Loan Forgiveness

04/15/2020

: Most Social Security and Railroad Retirement recipients don’t need to file a return or provide information to get an Economic Impact Payment.

COVID Tax Tip 2020-41, April 15, 2020