UNLIMITED MULTISERVICES

01/25/2022

ITS’S TAX TIME

Get your paperwork together and send.

07/17/2021

IRS: Monthly Child Tax Credit payments begin

WASHINGTON — The Internal Revenue Service and the Treasury Department announced today that millions of American families have started receiving monthly Child Tax Credit payments as direct deposits begin posting in bank accounts and checks arrive in mailboxes.

This first batch of advance monthly payments worth roughly $15 billion reached about 35 million families today across the country. About 86% were sent by direct deposit.

The payments will continue each month. The IRS urged people who normally aren’t required to file a tax return to explore the tools available on IRS.gov. These tools can help determine eligibility for the advance Child Tax Credit or help people file a simplified tax return to sign up for these payments as well as Economic Impact Payments, and other credits you may be eligible to receive.

Under the American Rescue Plan, each payment is up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. Normally, anyone who receives a payment this month will also receive a payment each month for the rest of 2021 unless they unenroll. Besides the July 15 payment, payment dates are: Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15.

Here are further details on these payments:

Families will see the direct deposit payments in their accounts starting today, July 15. For those receiving payment by paper check, they should remember to take into consideration the time it takes to receive it by mail.
Payments went to eligible families who filed 2019 or 2020 income tax returns.
Tax returns processed by June 28 are reflected in these payments. This includes people who don’t typically file a return, but during 2020 successfully registered for Economic Impact Payments using the IRS Non-Filers tool or in 2021 successfully used the Non-filer Sign-up Tool for Advance CTC, also on IRS.gov.
Payments are automatic. Aside from filing a tax return, including a simplified return from the Non-Filer Sign-Up tool, families don’t have to do anything if they are eligible to receive monthly payments.

03/20/2021

01/23/2021

It’s that time again:

The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.

The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.

This programming work is critical to ensuring IRS systems run smoothly. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers. These changes ensure that eligible people will receive any remaining stimulus money as a Recovery Rebate Credit when they file their 2020 tax return.

To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need. People can begin filing their tax returns immediately with tax software companies, including IRS Free File partners. These groups are starting to accept tax returns now, and the returns will be transmitted to the IRS starting February 12.

"Planning for the nation's filing season process is a massive undertaking, and IRS teams have been working non-stop to prepare for this as well as delivering Economic Impact Payments in record time," said IRS Commissioner Chuck Rettig. "Given the pandemic, this is one of the nation's most important filing seasons ever. This start date will ensure that people get their needed tax refunds quickly while also making sure they receive any remaining stimulus payments they are eligible for as quickly as possible."

09/26/2020

Deadlines to register for an Economic Impact Payment are just around the corner

Federal benefit recipients who don’t normally have a filing requirement but do have qualifying children must register by Wednesday, Sept. 30 to receive a $500 catch-up payment per child. Other non-filers have until Thursday, Oct. 15 to register for their Economic Impact Payment.

Anyone using the Non-Filers tool can speed up the arrival of their payment by choosing to receive it by direct deposit. Those who don’t choose direct deposit will get a check.

The deadline to claim a $500 payment for a qualifying child is Wednesday, Sept. 30, 2020.

The deadline applies to individuals who didn't receive $500 per qualifying child earlier this year when they received their own automatic Economic Impact Payment and who receive:

Social Security retirement
Survivor or disability benefits
Supplemental Security Income (SSI)
Railroad Retirement benefits
Veterans Affairs Compensation
Veterans Affairs Compensation and Pension (C&P) benefits
Federal benefit recipients can use the Non-Filers: Enter Payment Info Here tool to get a catch-up payment for a qualifying child if they have NOT done one of the following:

already used the Non-Filers tool to provide information about their qualifying child or
filed their 2019 or 2018 federal tax return
Anyone who filed or plans to file a 2018 or 2019 tax return should NOT use this tool and should file their tax return by the Oct. 15, 2020 deadline.

People who’ve already used the Non-Filers tool to provide info on children don’t need to do anything else. The IRS will automatically make a payment to them in October.

Thursday, Oct. 15, 2020 is the registration deadline to get an Economic Impact Payment this year. Eligible individuals with little or no income who are not required to file a tax return may still qualify to receive an Economic Impact Payment this year, if they use the Non-Filers: Enter Payment Info Here tool by Oct. 15, 2020.

Anyone who misses either of these deadlines will need to wait until next year and claim the payment as a credit on their 2020 federal income tax return.

01/07/2020

It’s that time of the year

02/26/2019

12 Tax Deductions That Disappeared This Year

You won't be able to take advantage of these now-extinct tax breaks under the new tax code

Residents in states such as California and New York are likely to be more affected by some of the cut deductions.

THIS TAX-FILING SEASON, taxpayers are poised to experience the impact of the Tax Cuts and Jobs Act of 2017, which eliminated beneficial deductions and credits. Touted as the largest tax overhaul in 30 years, the law could be a mixed bag for many households as it increases the standard deduction and child tax credit, but makes more than a dozen deductions extinct.

Some filers may receive a significant tax break, while others may see their refunds shrink as a result of new deduction rules.

While some crucial tax breaks might return after some provisions of the tax law expire in 2025, here are 12 tax deductions that disappeared this year:

*The standard $6,350 deduction.

*Personal exemptions.

*Unlimited state and local tax deductions.

*A $1 million mortgage interest deduction.

*An unrestricted deduction for home equity loan interest.

*Deductions for unreimbursed employee expenses.

*Miscellaneous itemized deductions.

*A deduction for moving expenses.

*Unrestricted casualty loss deduction.

*Alimony deduction.

*Deductions for certain school donations.
*Deductions from tax extenders.

If you typically deduct many of these items from your taxes, you could be in trouble this year.

Read on for more information on the tax deductions that have changed or become extinct.

1. The standard $6,350 deduction. Some of the best news from the tax reform law is an increase in the standard deduction. While single taxpayers were only eligible for a $6,350 standard deduction last year, that amount nearly doubled in the 2018 tax year to $12,000 for individuals. Married couples will get a standard deduction of $24,000 for 2018, up from $13,000 for 2017. And head of household filers will see a bump in their standard deduction from $9,550 to $18,000 for 2018.

2. Personal exemptions. The increased standardized deduction will be welcome news for many households, but there's a catch: Personal exemptions have been eliminated. While not technically a deduction, the exemption allowed taxpayers to subtract $4,050 from their taxable income for each dependent they claimed, so eliminating it is a significant loss for families. The increased standard deduction helps soften the blow of losing personal exemptions, but it might not make up for it entirely, says Mark Jaeger, director of tax development for TaxAct, a provider of tax preparation software and services.

3. Unlimited state and local tax deductions. On this year's tax forms, deductions for state and local taxes – known as SALT deductions – are capped at $10,000. "That to me is the one (new tax code rule) that is going to impact middle class taxpayers the most," McClung says. It will particularly affect those living in states like California and New York, which both have above-average state income tax and property tax rates.

4. A $1 million mortgage interest deduction. Another change that could disproportionately affect those living in states such as California and New York is the restriction on the amount of mortgage interest that can be deducted. Last year, married taxpayers could deduct interest on a mortgage of up to $1 million. For the 2018 tax year, only interest on mortgage values of up to $750,000 are deductible.

5. An unrestricted deduction for home equity loan interest. The tax law also eliminates the unlimited interest deduction for both new and existing home equity loans. Homeowners used to be able to deduct interest for loans taken out for any purpose such as debt consolidation or travel. Now, only interest on loans used to make home improvements are eligible for a deduction. Plus, the combined total of the first mortgage and home equity loan can't exceed $750,000 for married couples filing jointly.

6. Deductions for unreimbursed employee expenses. Workers who made unreimbursed purchases related to their job were able to deduct any amount that exceeded 2 percent of their adjusted gross income in 2017. However, taxpayers won't see that deduction available on their 2018 tax return.

7. Miscellaneous itemized deductions. Unreimbursed work expenses is just one of several miscellaneous itemized deductions that have been disallowed under the new law. Fees for financial services is another example. Taxpayers used to be able to deduct advisor fees and tax preparation fees. Other disappearing miscellaneous deductions include costs related to tax preparation services, investment fees, professional dues and a long list of other previously approved items.

8. A deduction for moving expenses. If you relocated for a new job last year, forget about deducting your moving expenses from your 2018 taxes. The deduction has been eliminated for virtually all workers. It actually only applies (now) to military members who are required to move.

9. The unrestricted casualty loss deduction. In 2018, only those in presidentially designated disaster zones can deduct casualty losses on their tax forms. That means, for example, if your house burns down but insurance doesn't cover all your costs, you can't write off the loss from your federal taxes.

10. Alimony deduction. In the past, couples could set up alimony agreements that would allow the person making payments to deduct that money from their federal taxes. That won't be an option this year. You won't be able to deduct alimony anymore because it's not taxable to the recipient. And since alimony is no longer considered income, the recipient can't deduct any of the legal fees they incurred to get it for any divorce completed after Dec. 31, 2018.

11. Deductions for certain school donations. Some colleges and universities require alumni to make donations before they are able to purchase season tickets. That donation to the school used to be allowed as a deduction. However, donations tied to the right to purchase tickets are no longer deductible for the 2018 tax year.

12. Deductions from tax extenders. Each year, Congress passes legislation extending temporary tax breaks. Known as tax extenders, these include deductions for college tuition and fees and mortgage insurance premiums. Legislative leaders have yet to approve tax extenders for this year and doesn’t look like it will be passed.

01/25/2019

The passing of tax reform brought many eliminated tax deductions. To make the most of your 2018 tax year, it’s important to understand the changes. You may want to make financial adjustments now to ensure your tax outcome is

List of Eliminated Tax Deductions
Take a look at these eliminated tax deductions to understand if they affect your situation and how you can handle it.

Moving expenses
You can no longer deduct moving expenses when you relocate for a job or for self-employment.

Action plan: Because moving expenses are part of the eliminated tax deductions, it’s more important than ever to keep a lid on moving costs. For example, you may want to have shipping containers delivered to your door so you can load them yourself instead of hiring a full-service moving company to wrap every piece of glass. You’ll also want to consider the pros and cons of moving more carefully before you agree to move for a transfer or new job.

Home equity loan interest
Starting in 2018, you cannot deduct interest on a home equity loan, unless you used the loan to buy, build, or significantly improve your home and the loan is secured by your home.

Action plan: Consider paying down home equity lines of credit (unless you have higher interest rate consumer debt you should pay off first). If you take out new home equity debt, make sure it meets the requirements to be deductible, if possible.

Personal exemptions
For the 2018 tax year and beyond, you can no longer claim personal exemptions for yourself, your spouse, or your dependents. Previously, you could lower your taxable income by about $4,000 for each person in your household.

Action plan: Don’t panic! For most people, other changes in the tax code should make up for the lack of a personal exemption. The standard deduction almost doubled for most tax filers. Plus the value of expanded credits for children and dependents improved as well.

Deductions for state and local taxes
Before tax reform, you could deduct state and local property taxes, plus either state and local income taxes or sales tax. Now, your total deduction for state and local income tax is limited to $10,000 per income tax return ($5,000 if married filing separately).

Action plan: Now more than ever, you should consider taking steps to limit your state and local tax burden. You won’t want to pay property tax on real estate or personal property that you don’t need or use, for example. You may want to look into ways to reduce your real estate taxes, such as open space designations or challenging your assessment.

Miscellaneous Itemized Deductions
On Schedule A, you can no longer claim all miscellaneous itemized deductions previously subject to a 2 percent floor. That includes:

Employee business expenses
Tax preparation expenses
Safe deposit box rental
Investment fees
Action plan: There’s more incentive than ever to cut expenses when they are part of the list of eliminated tax deductions. For example, not everyone needs to rent a safe deposit box or pay a professional to prepare their taxes. (Hint: offers some DIY options.) If you have significant employment expenses, you can try to press your employer to reimburse those costs. Or, you can get creative and find out if you qualify as an independent contractor instead of as an employee. (Self-employed people can still deduct business expenses on Schedule C.)

Casualty and theft losses
You can no longer take a deduction for casualty or theft losses, except in places the president declares disaster areas.

Action plan: You can’t avoid all potential for casualty losses, but you can make sure your homeowners or renters insurance is up to date and covers natural disasters. That includes floods and fires.

Alimony payments (2019)
You can no longer deduct alimony payments as a result of a divorce settled after 2018. That means the tax reform changes do not apply to settlements finalized before Jan. 1, 2019. If you receive alimony payments from a settlement in place from 2019 and forward, you won’t pay tax on the alimony you receive.

Action plan: If you are in the midst of divorce proceedings, make sure the division of property and alimony payments reflects the new tax realities. Generally, the alimony payments can be smaller to compensate for the change in tax law.

01/23/2019

The IRS has announced that they will begin accepting and processing all individual returns on Monday, January 28th.

01/08/2019

January 7, 2019

WASHINGTON ― Despite the government shutdown, the Internal Revenue Service today confirmed that it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled.

“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig.

Congress directed the payment of all tax refunds through a permanent, indefinite appropriation (31 U.S.C. 1324), and the IRS has consistently been of the view that it has authority to pay refunds despite a lapse in annual appropriations. Although in 2011 the Office of Management and Budget (OMB) directed the IRS not to pay refunds during a lapse, OMB has reviewed the relevant law at Treasury’s request and concluded that IRS may pay tax refunds during a lapse.

The IRS will be recalling a significant portion of its workforce, currently furloughed as part of the government shutdown, to work. Additional details for the IRS filing season will be included in an updated FY2019 Lapsed Appropriations Contingency Plan to be released publicly in the coming days.

“IRS employees have been hard at work over the past year to implement the biggest tax law changes the nation has seen in more than 30 years,” said Rettig.

As in past years, the IRS will begin accepting and processing individual tax returns once the filing season begins. For taxpayers who usually file early in the year and have all of the needed documentation, there is no need to wait to file. They should file when they are ready to submit a complete and accurate tax return.

The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.

Software companies and tax professionals will be accepting and preparing tax returns before Jan. 28 and then will submit the returns when the IRS systems open later this month. The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds.