Many Americans wish to help out their communities and favorite charities through end of year financial support.  Are you able to do it more efficiently?

The easiest was to give is through a check or electronic giving portal.  Cash comes right out of your bank account.  Here are three fairly simple strategies to consider.

Taxpayers, including those who received stimulus payments or advance Child Tax Credit payments, should take steps now to make filing their tax returns easier in 2022.  Planning will help taxpayers file an accurate return and avoid processing delays that can hold up refunds, the IRS says.

Did you know you can make a $300 donation (or $600 for a married couple filing jointly) and get a tax deduction – even if you do not itemized your deductions?

The IRS has reminded taxpayers that a special tax provision will allow more Americans to deduct up to $600 in donations to qualifying charities on their 2021 federal income tax return.  It is just for 2021.

The Internal Revenue Service sent a large number of CP14 notices dated July 5, 2021 to individuals that had an amount due on their 2020 income tax return. These notices appear to be sent in error; however, there are steps you should take to prevent further action and dispute the amount due.

Based on our research and conversations with other CPAs, the IRS has deposited tax payments made on individual’s 2020 income returns; but has not updated individual accounts to credit payments made.

As we begin the month of April, please be assured your 2020 income tax return has been prepared and is awaiting CPA review. You should expect to hear from us soon.

With some of the tax law changes that happened in 2021 that affected 2020, we have been awaiting guidance from the IRS for updated forms and how to report certain items correctly the first time. The tax returns become more complex (e.g., reconciling stimulus payments, cryptocurrency, due diligence reporting for tax credits, etc.) each year and we are attempting to keep everyone in compliance.

You can check the status of both your payments by using the IRS Get My Payment tool. If you have not received your full payment by the time you file your 2020 tax return, you may claim the Recovery Rebate Credit.

For more information, click HERE.

Here is a review of significant changes that may impact you for the tax year 2020 filing season from the:

• Coronavirus Aid, Relief and Economic Security (CARES) Act
• Families First Coronavirus Response Act
• Setting Every Community Up for Retirement Enhancement (SECURE) Act
• Taxpayer Certainty and Disaster Tax Relief Act of 2019.

The U.S. Treasury Department and Internal Revenue Service (IRS) released guidance yesterday (November 18, 2020) clarifying the tax treatment of expenses where a Paycheck Protection Program (PPP) loan has not been forgiven by the end of the year the loan was received. 

Since businesses are not taxed on the proceeds of a forgiven PPP loan, the expenses are not deductible. This results in neither a tax benefit nor tax harm since the taxpayer has not paid anything out of pocket.

Generally, if you rent out a vacation home while you not using it personally, you can deduct expenses to offset taxable income from the rental.  This includes mortgage interest, property taxes, repairs, utilities, insurance, etc. (Mortgage interest and property taxes are subject to additional rules for a qualified personal residence). 

You might even be able to deduct a loss on your income tax return in that year if your personal use of the vacation home does not exceed the greater of (a) 14 days or (b) 10% of the time the home is rented out.

The original tax filing deadline has passed.  Here are a couple of resources available for individual tax payers to get quick answers for yourself for free.

Refund Status
You can check on your refund using the IRS Where’s My Refund? tool. It is available on IRS.gov and the IRS2Go app.   If you do not have access to a computer can call 800-829-1954.  The tool updates once daily, so there’s no need to check more often.  You will need:

On May 6, 2020, the IRS came out with the following guidance for Economic Stimulus checks sent to dead people.  The whole answer is at www.irs.gov/coronavirus/economic-impact-payment-information-center#more (See question 41)

In summary,

A Payment made to someone who died before receipt of the Payment should be returned to the IRS in full.  For payments made to joint filers and one spouse had not died before receipt of the Payment, you only need to return the portion of the Payment made on account of the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000.

The Treasury Department is working on a web-based portal (www.irs.gov) that will allow individuals to submit direct deposit details in order to “receive payments immediately as opposed to checks in the mail.”  Treasury Secretary Steven Mnuchin said Friday that people can expect to receive their checks in three weeks – April 17 is when the direct deposits will go into people’s accounts.  A check in the mail could take longer.

The Treasury Department is working on a web-based portal (www.irs.gov) that will allow individuals to submit direct deposit details in order to “receive payments immediately as opposed to checks in the mail.”  Treasury Secretary Steven Mnuchin said Friday that people can expect to receive their checks in three weeks – April 17 is when the direct deposits will go into people’s accounts.  A check in the mail could take longer.