Helen Kerwin Saltzman Bookkeeping & Tax Preparation Services

It's That Time of Year Again! Tax Time!

Just a reminder of forms to start collecting to prepare for filing your 2021 taxes:

Forms W-2 from employer(s).

Forms (1099-DIV) (1099-NEC) (1099-R) 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. If self employed or independent contractor-Profit and Loss Statement for the year or list of income and expenses.

Form 1099-INT for interest received.

Other income documents and records of virtual currency transactions-Social Security (SSA 1099), Stock sales-(1099-B)

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.

Hope you have a Spooky Fun Halloween Weekend!

NEWS FROM THE IRS...UNEMPLOYMENT COMPENSATION ADJUSTMENTS STILL BEING WORKED ON.

IRS continues unemployment compensation adjustments, prepares another 1.5 million refunds

WASHINGTON – The Internal Revenue Service reported today that another 1.5 million taxpayers will receive refunds averaging more than $1,600 as it continues to adjust unemployment compensation from previously filed income tax returns.

The American Rescue Plan Act of 2021, which became law in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000.

Refunds by direct deposit will begin July 28 and refunds by paper check will begin July 30. This is the fourth round of refunds related to the unemployment compensation exclusion provision.

Since May, the IRS has issued over 8.7 million unemployment compensation refunds totaling over $10 billion. The IRS will continue reviewing and adjusting tax returns in this category this summer.

The IRS effort focused on minimizing burden on taxpayers so that most people won’t have to take any additional action to receive the refund. The IRS review means most taxpayers affected by this change will not have to file an amended return because IRS employees have reviewed and adjusted their tax returns for them. For taxpayers who overpaid, the IRS will either refund the overpayment or apply it to other outstanding taxes or other federal or state debts owed.

For this round, the IRS identified approximately 1.7 million taxpayers due an adjustment. Of that number, approximately 1.5 million taxpayers are expected to receive a refund. The refund average is $1,686.

The IRS started with the simplest tax returns and is now reviewing more complex returns. The average refund amount is higher for this round because the IRS included an adjustment to the Advance Premium Tax Credit (APTC).

Most taxpayers need not take any action and there is no need to call the IRS. However, if, because of the excluded unemployment compensation, taxpayers are now eligible for deductions or credits not claimed on the original return, they should file a Form 1040-X, Amended U.S. Individual Income Tax Return.

I don't know about you...but tax time is just down right stressful at times. Take a break and laugh. It's good for the soul!