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IRS Updates

Get Ready for Taxes: What’s new and what to consider when filing in

2021

Get Ready for Taxes: Steps to take now to make tax filing easier in

2021

Publication 5348 - Get Ready to File

Publication 5349 - Year Around Tax Planning for Everyone 

https://go.usa.gov/x7hPP

 https://www.irs.gov/pub5349

https://www.remotebusinesssolutionsinc.org

Tax Reform page

outlines steps 

http://Publication 972, Child Tax Credit and Credit for Other

Dependents

Publication 501, Dependents, Standard Deduction and Filing

Information

http://Taxpayer Bill of Rights Your Rights as a Taxpayer Taxpayer

Advocate Service

Be sure to write the FEMA declaration number – 4586 − 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.

Taxpayers can claim the credit for other dependents in addition to the 

child and dependent care credit and the earned income credit. They

can use the IRS Interactive Tax Assistant, Does My Child/Dependent

Qualify for the Child Tax Credit or the Credit for Other Dependents?, to

help determine if they are eligible to claim the credit.

EITC eligibility

  • A taxpayer’s eligibility for the credit may change from year to
  • year, so it's a good idea for people to use the EITC Assistant to
  • find out if they qualify.

There’s a new rule to help people impacted by a job loss or change in

income in 2020. taxpayers can use their2019 earned income to figure

your EITC, if their 2019 earned income was more than their 2020

earned income. The same is true for the additional child tax credit. For

details, see the instructions for Form 1040.

More information:

Publication 972, Child Tax Credit and Credit for Other Dependents
Publication 501, Dependents, Standard Deduction and Filing I

nformation

For more information, see COVID-19-Related Employee Retention

Credits: How to Claim the Employee Retention Credit FAQs

For additional details on the recordkeeping rules for substantiating gifts to charity,

see Publication 526, Charitable Contributions, available on IRS.gov. More information about other coronavirus-related relief,

can be found at IRS.gov.

More Information

Publication 5477, All taxpayers now eligible for Identity Protection PINs PDF
Publication 5477 - SP, All taxpayers now eligible for Identity Protection PINs
Publication 5367 - EN and SP, Identity Protection PIN Opt-In Program for Taxpayers
Get an Identity Protection PIN – IRS YouTube video

The IRS continues its efforts to expand ways to communicate to taxpayers who prefer to get information in other languages. the first time ever,

the agency has posted to IRS.gov a Spanish language version of Form 1040 and the related instructions.

IRS to Handle Unemployment Returns, Don't Amend
Returns filed with unemployment benefits prior to the $10,200 exclusion should not be amended. The IRS has indicated it will refigure taxes on these returns and adjust the taxpayer's account accordingly. The IRS will then send any refund amount directly to the taxpayer.
The IRS has not yet communicated a timeline for making adjustments and sending refunds.
Look for an official news release in the coming days: 
https://www.irs.gov/newsroom
If you file state returns in states that conform to the federal unemployment exclusion, you may still need to file amended state returns for your affected clients.


  
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People who were unemployed last year and paid taxes on benefits could automatically receive refunds as part of a fix being worked on by the Internal Revenue Service. The first $10,200 of unemployment income was made tax-free for most people under recent legislation, but it was passed after tax season had started.
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IRS Tax Tips March 23, 2021

Useful Links:

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Issue Number: COVID Tax Tip 2021-35


IRS is issuing third round

of

Economic Impact Payments

The IRS started issuing the third round of Economic Impact

Payments. No action is needed by most taxpayers.  The IRS

will issue payments automatically by direct deposit and through

the mail as a check or debit card.

Many people will receive the third payment the same way they

received the first and second Economic Impact Payments.

Because these payments are automatic for most eligible people,

there’s no need to contact financial institutions or the IRS.

People can check the Get My Payment tool on IRS.gov for status

of their third stimulus payment.

Highlights of the third Economic Impact Payments
In general, most people will get $1,400 for themselves and

$1,400 for each qualifying dependent claimed on their tax return.

As with the first two Economic Impact Payments, most people

will receive their third payment without having to take any action.

The third Economic Impact Payment is based on the taxpayer's

latest processed tax return from either 2020 or 2019. This

includes anyone who successfully registered at IRS.gov using

the agency's Non-Filers tool last year or submitted a simplified

tax return. If the IRS received and processed a taxpayer's 2020

return before issuing someone’s third Economic Impact

Payment, the amount is based on the 2020 return.

Those who received the first or second payment but don't

receive a payment by direct deposit will generally receive a

check or a prepaid debit card, referred to as an EIP Card. The

IRS will not add the third payment to an existing EIP card that

people received for the first or second round of stimulus

payments.

Under the new law, the IRS can’t apply the third Economic

Impact Payment to past-due federal debts or back taxes.

Who is eligible for the third Economic Impact Payment
Generally, U.S. citizens or U.S. resident aliens are eligible for the

full amount of the third Economic Impact Payment if they and

their spouse, if they’re filing jointly, are not a dependent of

another taxpayer and have a valid Social Security number and

their adjusted gross income on their tax return does not exceed:

  • $150,000, if married and filing a joint return or if filing as a qualifying widow or widower.
  • $112,500, if filing as head of household.
  • $75,000 for eligible individuals using any other filing
  • statuses, such as single filers and married people filing separate returns.

The payments phase out -- or reduce -- above those AGI

amounts. This means taxpayers will not receive a third payment

if their AGI exceeds:

  • $160,000, if married and filing a joint return or if filing
  • as a qualifying widow or widower.
  • $120,000, if filing as head of household.
  • $80,000 for eligible individuals using other filing
  • statuses, such as single filers and married people filing separate returns.

More details about the third round of Economic Impact Payments

 are available on IRS.gov.

New Common Questions & Derived Answers About EIP3:

EIP 3:

Unemployment:

3/29/2021


  • Third round of Economic Impact Payments: The IRS, the Department of Treasury and the Bureau of the Fiscal Service announced they
  • are disbursing approximately 37 million payments in the second batch of Economic Impact Payments from the American Rescue Plan.
    • Economic Impact Payments will continue to roll out in batches to millions of Americans in the coming weeks. So far, 127 million payments
    • have been disbursed totaling approximately $325 billion.
    • The second batch of payments includes direct deposits, as well as paper checks and debit cards that are being mailed.
    • Additional batches of payments will be sent in the coming weeks.
  • Combatting COVID-19 fraud: The IRS Criminal Investigation Division (IRS-CI) marks the one-year anniversary of the Coronavirus Aid, Relief
  • and Economic Security (CARES) Act by pledging its continued commitment to investigating COVID-19 fraud.
  • Where’s My Refund? tool and IRS2Go app: The IRS reminds taxpayers that the most convenient way to check on a tax refund is by using
  • the Where's My Refund? tool at IRS.gov or through the IRS2Go Mobile App.
  • Tax deductible medical expenses to prevent the spread of COVID-19: The IRS issued an announcement clarifying that the purchase of
  • personal protective equipment such as masks, hand sanitizer and sanitizing wipes, for the purpose of preventing the spread of coronavirus are
  • deductible medical expenses.

Materials/resources:  Please share and adapt these materials for your communications, including emails, newsletters, websites, social media and

other channels. We need your help in sharing these important materials with your families, friends, partners and clients.

News releases:

  • IRS, Treasury disburse another 37 million Economic Impact Payments from the American Rescue Plan  English ?Spanish
  • IRS Criminal Investigation (CI) pledges continued commitment to investigating COVID-19 fraud as CARES Act reaches one-year anniversary  
  • English ?Spanish
  • Tax Time Guide: Use the Where’s My Refund? Tool or IRS2Go app to check tax refund status  English ?Spanish
  • Face masks and other personal protective equipment to prevent the spread of COVID-19 are tax deductible English

   

Additional materials/resources:

3/29/2021


IRS Newswire April 9, 2021

News Essentials

What's Hot

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Around The Nation

e-News Subscriptions


The Newsroom Topics

Multimedia Center

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The Tax Gap

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Armed Forces

Latest News Home


IRS Resources

Compliance & Enforcement

Contact My Local Office

Filing Options

Forms & Instructions

Frequently Asked Questions

News

Taxpayer Advocate

Where to File

IRS Social Media


Issue Number:    IR-2021-84

Inside This Issue


IRS suspends requirement to repay excess

advance payments of the 2020 Premium Tax

Credit; those claiming net Premium Tax

Credit must file Form 8962

WASHINGTON — The American Rescue Plan Act of

2021 suspends the requirement that taxpayers

increase their tax liability by all or a portion of their

excess advance payments of the Premium Tax Credit

 (excess APTC) for tax year 2020. A taxpayer’s

excess APTC is the amount by which the taxpayer’s

advance payments of the Premium Tax Credit (APTC)

exceed his or her Premium Tax Credit (PTC).     

The Internal Revenue Service announced today that

taxpayers with excess APTC for 2020 are not required

to file Form 8962, Premium Tax Credit, or report an

excess advance Premium Tax Credit repayment on

their 2020 Form 1040 or Form 1040-SR, Schedule 2,

Line 2, when they file.

Eligible taxpayers may claim a PTC for health

insurance coverage in a qualified health plan

purchased through a Health Insurance Marketplace.

Taxpayers use Form 8962, Premium Tax Credit to

figure the amount of their PTC and reconcile it with

their APTC. This computation lets taxpayers know

whether they must increase their tax liability by all or

a portion of their excess APTC, called an excess

advance Premium Tax Credit repayment, or may

claim a net PTC.

Taxpayers can check with their tax professional or

use tax software to figure the amount of allowable

PTC and reconcile it with APTC received using the

information from Form 1095-A, Health Insurance

Marketplace Statement.
 
The process remains unchanged for taxpayers

claiming a net PTC for 2020. They must file

Form 8962 when they file their 2020 tax return. See the Instructions for Form 8962 for more information.

Taxpayers claiming a net PTC should respond to an

IRS notice asking for more information to finish

processing their tax return.

Taxpayers who have already filed their 2020 tax

return and who have excess APTC for 2020 do not

need to file an amended tax return or contact the IRS.

The IRS will reduce the excess APTC repayment

amount to zero with no further action needed by the

taxpayer. The IRS will reimburse people who have

already repaid any excess advance Premium Tax

Credit on their 2020 tax return. Taxpayers who

received a letter about a missing Form 8962 should

disregard the letter if they have excess APTC for

2020. The IRS will process tax returns without Form

8962 for tax year 2020 by reducing the excess

advance premium tax credit repayment amount to

zero.

Again, IRS is taking steps to reimburse people who

Form 8962, reported, and paid an excess advance

Premium Tax Credit repayment amount with their

2020 tax return before the recent legislative changes

were made. Taxpayers in this situation should not file

an amended return solely to get a refund of this

amount. The IRS will provide more details on

IRS.gov. There is no need to file an amended tax

return or contact the IRS. 

As a reminder, this change applies only to reconciling

tax year 2020 APTC. Taxpayers who received the

benefit of APTC prior to 2020 must file Form 8962 to

reconcile their APTC and PTC for the pre-2020 year

when they file their federal income tax return even if

they otherwise are not required to file a tax return for

that year.  The IRS continues to process prior year tax

returns and correspond for missing information.  If the

IRS sends a letter about a 2019 Form 8962, we need

more information from the taxpayer to finish

processing their tax return. Taxpayers should respond

to the letter so that the IRS can finish processing the

tax return and, if applicable, issue any refund the

taxpayer may be due.

See the  Form 8962, Premium Tax Credit, and IRS 

Fact Sheet for more details about the changes related

to the PTC for tax year 2020.

Here is a video tax tip from the IRS: 

Tax Exempt Organization Search (TEOS) English | ASL

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