Thank You for Allowing Us to Serve You

Thank You for Allowing Us to Serve You

 Whew!

Tax season has come and (mostly) gone. All those forms and figures are put to rest for another year. And while we’re catching our breath, we wanted to say “Thank You!” for putting your trust in us. For more than 10 years, Premier CPA Services has strived to provide you with the best tax preparation possible. Our goal is always to help you pay the minimum amount of taxes necessary while making sure everything is done efficiently, timely and accurately.

If we didn’t get your return done by April 18, we’ll notify you as soon as it’s complete. And if you’ve requested an extension for filing your taxes, we’re ready to start working on them whenever you have your paperwork ready.

Also, if you ever receive a notice from the IRS, please don’t hesitate to contact us. We’ll be happy to answer your questions and help you resolve any tax-related issues.

Thank you again for a busy and successful tax season!

Jackie, Mimi & the entire Premier CPA Services staff

How to Check Your Refund Status

If you filed electronically and chose direct deposit for your refund, you chose the safest and fastest way to file. Most tax refunds are issued within 21 days (though some may take longer).

And the easiest way to check on your tax refund is by using the “Where’s My Refund?” tool on the IRS website or through the IRS2Go mobile app. You can use the tool within 24 hours after your e-filed return is received or four weeks after you mail a paper return.

To use the tool, you will need:

  • Your Social Security number or Individual Taxpayer Identification number
  • Your tax-filing status
  • The exact amount of the refund claimed on your tax return

The tool shows the progress of your tax return as:

  • Return Received
  • Refund Approved
  • Refund Sent

When the status changes to “Refund Approved,” then the IRS is preparing to send the refund as a direct deposit to your bank account, or mail it to you via check. The IRS updates the “Where’s My Refund?” tool once a day, usually overnight, so you can check the status daily. Note that calling the IRS won’t speed up your refund. The information available on “Where’s My Refund?” is the same information available to IRS telephone assistors.

For state tax updates, please visit:

Video Tax Tip

This video explains how to check the status of your tax refund.

Tax Matters: Report Those “Miscellaneous” Types of Income & Assets

Tax Matters: Report Those “Miscellaneous” Types of Income & Assets

 

When you earn several types of income throughout the year, it’s easy to lose track and forget to report some. The IRS does not forget, however. So be sure to report:

Gig Work

This is income earned providing on-demand work, services or goods, often through a digital platform (e.g., Uber or Fiverr). This applies even if the work is part-time or temporary, not reported on Form 1099 or W-2, or is received via cash, property, goods or virtual currency.

Virtual Currency

If you received any virtual currency as compensation or disposed of any virtual currency in a trade or business, you must report the income (or loss). This includes receiving virtual currency as payment for goods or services provided, as a result of mining and staking activities, or even exchanging for another virtual currency.

Foreign Income & Assets

You must report unearned income, such as interest, dividends, and pensions, from sources outside the United States unless exempt by law or a tax treaty. You must also report foreign-earned income and assets, such as wages and tips. You are allowed an automatic two-month extension to June 15 if you serve in the military, or both your tax home and abode are outside the U.S. and Puerto Rico, though any tax due must still be paid by April 18, 2022.

Have You Taken Your RMD?

A Required Minimum Distribution (RMD) is the minimum amount that you must withdraw from your IRA or retirement plan account each year AFTER you reach age 72 (or 70½ if you were 70½ before January 1, 2020). In a workplace retirement plan, you can delay taking your RMD if you continue working and you’re not a 5% owner. However, you are still required to take RMDs from your traditional IRAs, and SEP, SIMPLE and SARSEP IRAs even if you continue working.

If you altered taking your RMDs in 2020 due to the CARES Act or SECURE Act, you may need to consider your current status.

If you reached age 70½ in 2019, you may have waived your RMDs due in 2020. However, you did have a 2021 RMD due by December 31, 2021, based on your account balance on December 31, 2020.

If you reached age 72 in 2021 (and didn’t reach 70½ in 2019), your 2021 RMD is due by April 1, 2022, and is based on your account balance on December 31, 2020. Your 2022 RMD is due by December 31, 2022, based on your account balance on Dec. 31, 2021.

If you left your job in 2021 and rolled over your workplace retirement plan into your IRA, the RMD from your IRAs for 2021 won’t be affected by the rollover, but you may have an RMD due from the retirement plan.

  • Amounts rolled over to your IRA from a workplace retirement plan in 2021 don’t affect your IRA RMD calculation since 2021 RMDs are based on your IRA account balances on December 31, 2020.
  • If you have a 2021 RMD due from your workplace retirement plan, it cannot be rolled over to your IRA.

Beneficiaries of IRA accounts must follow special distribution rules, which can be confusing. The SECURE Act changed how and when beneficiaries must take distributions when the account holder dies after 2019. If you’re unsure of your status, please contact us today. Missing deadlines can be costly, but we’re here to help.

Are Your Social Security Benefits Taxable?

If you receive Social Security benefits — monthly retirement, survivor and disability benefits — you may need to pay taxes on some of those benefits depending on your income and filing status. To determine if your benefits are taxable, take half of the Social Security benefits you received and add it to your other income, including pensions, wages, interest, dividends and capital gains.

50% of your benefits may be taxable if you are:

  • Filing single, head of household or qualifying widow or widower with $25,000 – $34,000 income.
  • Married filing separately and lived apart from your spouse with $25,000 – $34,000 income.
  • Married filing jointly with $32,000 – $44,000 income.

Up to 85% of your benefits may be taxable if you are:

  • Filing single, head of household or qualifying widow or widower with more than $34,000 income.
  • Married filing jointly with more than $44,000 income.
  • Married filing separately and lived apart from your spouse with more than $34,000 income.
  • Married filing separately and lived with your spouse at any time during 2021.

 

Do You Need More Time to File?

If you’re not ready to file your federal tax return by this year’s April 18 deadline, you can easily request an automatic six-month extension — to October 17. An extension allows for extra time to gather, prepare and file paperwork with the IRS. However, keep in mind that:

  • You must file an extension by April 18.
  • An extension to file does NOT grant you an extension to pay.
  • You should estimate and pay any tax owed by April 18 to avoid possible penalties.

Just let us know if you’d like us to request an extension for you. Or you can e-file an extension yourself using IRS Free File.

To get the extension, you must estimate your tax liability on Form 4868 and pay any amount due by April 18. You may also request an extension by using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card or digital wallet. There’s no need to file a separate Form 4868 when making an electronic payment and indicating it’s for an extension. The IRS will automatically count it as an extension.

1st Quarter Estimated Tax Payments Due April 18

If you don’t pay taxes through withholding from your paycheck, pension or government benefits, then you may need to pay estimated taxes each quarter. This typically applies if you’re self-employed, retired, an investor, or have a business or corporation. If you have a side-gig, such as driving an Uber, you may need to make additional tax payments each quarter. Other income generally not subject to regular withholding includes interest, dividends, capital gains, alimony and rental income. By paying quarterly estimated taxes, however, you can typically lessen or eliminate any underpayment penalties.

You can make payments online at IRS.gov/payments. When you set up an account, you can view your payment history, any pending payments and other useful tax information.

Other important reminders for Monday, April 18:

  • File your 2021 federal tax return and pay any tax due, or request a 6-month extension.
  • Contribute to your IRA for 2021.
  • Contribute to your HSA for 2021.
  • Contribute to your 401(k) or SEP for 2021 if self-employed.
Will You Be Receiving a Special Georgia Tax Refund?

Will You Be Receiving a Special Georgia Tax Refund?

 

Thanks to a State of Georgia revenue surplus, legislators passed (and Governor Kemp signed) HB 1302, which provides Georgia taxpayers a refund of some or all of their 2020 income taxes due. Here’s what you need to know.

Determining Your Refund

Refer to your 2020 Georgia income tax return. If you filed a Form 500, the amount will be based on your tax liability listed on line 16. If you filed a Form 500EZ, the amount will be based on your tax liability listed on line 4. Tax liability is the amount of tax owed on the return before credit for any withholding, tax credits or other tax payments.

The amount you receive will depend on your filing status:

  • Single filers and married individuals filing separately could receive a maximum refund of $250.
  • Head of Household filers could receive up to $375.
  • Married individuals filing joint returns could receive up to $500.

Note that if your tax liability in 2020 was less than the amounts listed above, you will only receive a refund for the amount of your actual tax liability. Also, you will not receive a refund if you were a dependent on another person’s return in 2020.

Eligibility for the Refund

To be eligible, you need to have filed your 2020 return and your 2021 return by the deadline for filing the 2021 return (including any extensions), which is April 18, 2022. If you were a part-year resident of Georgia, you will be eligible for a proportional refund based on your filing status and share of Georgia taxable income.

Also, any refund due would be subject to offset first against any existing liabilities you owe to the state. This includes debt collection or payments owed to the state, such as delinquent child support payments.

Receiving Your Refund

The bill was signed into law on March 23. If you filed your 2021 return recently or have not yet filed, you may receive the HB 1302 refund along with any other refund due. If your return has already been processed, you’ll receive a separate refund. The Department of Revenue will automatically deposit the refund into your bank account or mail a check if you did not request direct deposit.

For more details, visit the Georgia Department of Revenue website.

Have You Taken Your RMD?

A Required Minimum Distribution (RMD) is the minimum amount that you must withdraw from your IRA or retirement plan account each year AFTER you reach age 72 (or 70½ if you were 70½ before January 1, 2020). In a workplace retirement plan, you can delay taking your RMD if you continue working and you’re not a 5% owner. However, you are still required to take RMDs from your traditional IRAs, and SEP, SIMPLE and SARSEP IRAs even if you continue working.

If you altered taking your RMDs in 2020 due to the CARES Act or SECURE Act, you may need to consider your current status.

If you reached age 70½ in 2019, you may have waived your RMDs due in 2020. However, you did have a 2021 RMD due by December 31, 2021, based on your account balance on December 31, 2020.

If you reached age 72 in 2021 (and didn’t reach 70½ in 2019), your 2021 RMD is due by April 1, 2022, and is based on your account balance on December 31, 2020. Your 2022 RMD is due by December 31, 2022, based on your account balance on Dec. 31, 2021.

If you left your job in 2021 and rolled over your workplace retirement plan into your IRA, the RMD from your IRAs for 2021 won’t be affected by the rollover, but you may have an RMD due from the retirement plan.

  • Amounts rolled over to your IRA from a workplace retirement plan in 2021 don’t affect your IRA RMD calculation since 2021 RMDs are based on your IRA account balances on December 31, 2020.
  • If you have a 2021 RMD due from your workplace retirement plan, it cannot be rolled over to your IRA.

Beneficiaries of IRA accounts must follow special distribution rules, which can be confusing. The SECURE Act changed how and when beneficiaries must take distributions when the account holder dies after 2019. If you’re unsure of your status, please contact us today. Missing deadlines can be costly, but we’re here to help.

Tax Filing Deadline: April 18, 2022

If we have not yet received your materials to file your Personal Tax Return, we’ll be happy to file an extension for you. Just let us know. Then, when you’re ready, just bring your paperwork to our office during regular business hours. Our 2021 Personal Tax Preparation Checklist will help make sure you provide everything we need.

Where’s My Refund?

The fastest and easiest way to check on your tax refund is by using the “Where’s My Refund?” tool on the IRS website or through the IRS2Go mobile app. You can use the tool within 24 hours after your e-filed return is received or four weeks after you mail a paper return.

The tool shows the progress as:

  • Return Received
  • Refund Approved
  • Refund Sent

Filing electronically and using direct deposit is the safest and fastest way to file and receive your refund. Most tax refunds are issued within 21 days, though some may take longer.

For state tax updates, visit:

There’s Still Time To Contribute To Your IRA for 2021

There’s Still Time To Contribute To Your IRA for 2021

If you haven’t yet made a contribution to your IRA for 2021, you still have time. The deadline is the same as the tax-filing deadline: April 18, 2022. What’s more, if you plan to make a contribution by that date, you may be able to claim the deduction on your 2021 tax return.

 

Know Your Traditional IRA

An Individual Retirement Account (IRA) is a tax-advantaged personal savings plan that lets you set money aside for retirement. Generally, you can contribute up to $6,000 to your IRA for 2021. If you were 50+ by December 31, 2021, you can add another $1,000 to that limit. Depending on your status, your contributions to one or more traditional IRAs may be deductible up to the contribution limit or 100% of your compensation, whichever is less.

If you make contributions to employer retirement plans, such as a 401(k) or 403(b), an IRA, or an Achieving a Better Life Experience (ABLE) account, may also be able to claim the Saver’s Credit. Also known as the Retirement Savings Contributions Credit, the amount of the credit is generally based on the amount of your contributions, your adjusted gross income and your filing status (see the chart below).

 

Know Your Roth IRA

While you may contribute to a Roth IRA, you cannot deduct those amounts. However, any qualified distributions you take at retirement age are tax-free. Note that Roth IRA contributions may be limited based on your filing status and income.

Please don’t hesitate to call us at 706-632-7850 with any questions. 

 

March 25th Deadline

March 25 is the last day we can accept materials to file your Personal Tax Return by the April 18 due date. If you’re running late, we’ll be happy to file an extension for you. Please bring your paperwork to our office during regular business hours, or drop it off in our after-hours dropbox. Our 2021 Personal Tax Preparation Checklist will help make sure you provide everything we need.

Remove Excess Salary Deferrals by April 15, 2022

If you contribute to a retirement plan at work, you are allowed a total of $19,500 (plus an additional $6,500 if age 50+) in salary deferrals. If you exceeded this limit in 2021, however, you must withdraw any excess deferral amounts, plus earnings, by April 15, 2022.

If you withdraw the excess salary deferrals, plus earnings, by April 15:

  • Excess deferrals are taxed in the calendar year deferred (2021).
  • Earnings on the excess are taxed in the year withdrawn (2022).
  • Excess is not subject to the 10% early distribution tax, 20% withholding, or spousal consent requirements.

If you do NOT withdraw the excess salary deferrals, plus earnings, by April 15:

  • Excess deferrals are taxed in the calendar year deferred (2021) and again in the year withdrawn.
  • Earnings on the excess are taxed in the year withdrawn.
  • Withdrawals may be subject to the 10% early distribution tax, 20% withholding, and spousal consent requirements.

If you made contributions to more than one retirement plan, you may have accidentally gone over the limit. If you’re not sure, contact us today for help determining this amount.

Parental Custody & Tax Credits: What You Need to Know

Parental Custody & Tax Credits: What You Need to Know

Do you have a legal agreement with your child’s other parent about who claims the child on their taxes? If so, you may have some questions about how to handle the Child Tax Credit and the 2021 Recovery Rebate Credit when filing your tax return.

Economic Impact Payments and the Recovery Rebate Credit

The third Economic Impact Payment (EIP) was an advance payment of the 2021 Recovery Rebate Credit. The IRS used your 2020 or 2019 tax information to determine eligibility and amounts. Here’s what that means for you:

  • If you did NOT receive a third-round EIP for a child you will be claiming on your tax return, you can claim the Recovery Rebate Credit, regardless of any EIP the other parent received.
  • If you DID receive a third-round EIP for a child you will NOT be claiming on your tax return, you are NOT required to pay back the EIP if, based on the information reported on your 2021 tax return, you should have received less.

Child Tax Credit

The IRS determined who received 2021 Advance Child Tax Credit payments based on the information on your prior-year’s tax return. So if you claimed the Child Tax Credit on your 2020 return, you would have received the Advance Child Tax Credit payments in 2021. Here’s what that means for you: 

  • If you knew you would not claim a child on your 2021 return, you had the option to unenroll from receiving monthly payments. If you did NOT unenroll and received monthly payments last year for a child you won’t be claiming on your 2021 tax return, you may have to repay those payments when you file. You may be excused from repaying some or all of the excess amount if you qualify for repayment protection.
  • If you were an eligible parent who did NOT receive advance payments for your child, you will be able to claim the full amount of the Child Tax Credit on your 2021 tax return — even if the other parent received Advance Child Tax Credit payments.

Where Do You Stand?

The rules on economic impact and child tax credit payments can be confusing. If we’re preparing your taxes for you, we’ll make sure to take advantage of every tax credit available to you. Please don’t hesitate to call us at 706-632-7850 with any questions.

 

Start 2022 Off Right by Checking Your Withholding

If you’re getting back a large tax refund, that only means that you’ve been giving the IRS more money from each paycheck than you should. Since you don’t earn interest on that money, you should not be using that as a way to save. It’s often smarter to have less money withheld from your paycheck and sock it away in a savings account that pays you interest.

On the other hand, if you owe a lot on your taxes, then you should be having more money taken out of your paycheck, or you should be making quarterly estimated payments. Not paying enough taxes throughout the year can incur fees and penalties, adding to your tax bill.

Get the new year off to a good start by checking your federal income tax withholding and adjusting it if necessary. You can use the IRS’ Tax Withholding Estimator to help you figure the right amount of tax to withhold, whether you’re an employee or self-employed. To use the tool, you’ll need to estimate:

  • Your 2022 income.
  • The number of children you will claim for the child tax credit and earned income tax credit.
  • Other items that will affect your 2022 tax return.

If you have more complicated income and expenses, such as pension income or long-term capital gains, you will not get a valid result using the Tax Withholding Estimator. Instead, contact us for help determining the appropriate withholding for your situation.

Tax Checklists & Deadlines

Please note the following deadlines for providing your materials to us:

  • March 1: Corporate/Partnership Tax Returns to file by March 15 (without extension).
  • March 25: Personal Tax Returns to file by April 18 (without extension).

You may bring your paperwork to our office during regular business hours, or drop it off in our after-hours dropbox. To make sure you provide everything we need, please use our 2021 Tax Preparation Checklist (Personal and/or Business):

IRS Video Tax Tip

Don’t have all the documents needed to file your return? Watch this tax tip for information on what to do.

Mark Your Calendar for Tax Prep Deadlines

Mark Your Calendar for Tax Prep Deadlines

Please note the following deadlines for providing your materials to us in time for the tax-filing deadline:

  • March 1: Corporate/Partnership Tax Returns to file by March 15 (without extension).
  • March 25: Personal Tax Returns to file by April 18 (without extension).

You may bring in your paperwork to our office during regular business hours, or drop it off in our after-hours dropbox out front. To make sure you provide everything we need, please use our 2021 Tax Preparation Checklist (Personal and/or Business). Just click here to download and print out:

Please note that most financial advisor companies are not issuing 1099 forms until February 15 or later. It’s OK to drop off everything else and just send us any lagging paperwork as soon as you receive it.

If you have any questions, please contact us at 706-632-7850 or email our office manager, Kimberly Mortimer, at kimberly@premiercpaservices.com.

 

Don’t Forget to Report Gig Economy Earnings

Whether it’s a full-time job or just a side-hustle, those extra earnings you make need to be reported on your tax return. Here are some things to keep in mind:

  • You should receive a Form 1099-K for any gig or freelance work that exceeds $600 total. The IRS expects you to report it even if you don’t receive a Form 1099-K, though.
  • If you are an independent contractor, you may be able to deduct some of your business expenses. Be sure to keep good records.
  • As an employee, your employer typically withholds income taxes for you. As a freelancer or gig worker, however, you are responsible for your own taxes. If you also have a job that takes out taxes, you can submit a new Form W-4 to your employer to have additional taxes withheld from your paycheck to help cover the difference. Otherwise, you’ll need to make quarterly estimated income tax payments throughout the year, as well as Social Security and Medicare taxes. (We can help you with this.)

If you’re not sure about your status as a worker in the gig economy, let us help. We can help you figure out whether you should be paying additional taxes and how to best set that up. And be sure to provide us with any Form 1099-Ks you receive when you drop off your tax-preparation materials.

Money Minute: Reporting Tips

If you receive tips while working, then you must report them as part of your gross income. Here are some “tips” for reporting your tips. Tips include:

  • Cash tips received directly from customers.
  • Non-cash tips added using credit, debit or gift cards.
  • Tips from a tip-splitting arrangement with other employees.
  • Non-cash items, such as tickets, passes or other items of value.

To help keep track of your tips:

  • Keep a daily tip record.
  • Report tips of less than $20 a month on your income tax return.
  • Report tips of more than $20 a month to your employer by the 10th day of the following month. Your employer must withhold taxes on those reported tips (so you don’t have to).

IRS Video Tax Tip

If you have taxable income from any payer that doesn’t withhold tax for you, check out this IRS video to see if you need to make estimated tax payments.

8 Tips to Avoid Costly Tax Return Mistakes

8 Tips to Avoid Costly Tax Return Mistakes

While tax laws are complicated, most common tax return errors are surprisingly simple. While we’ll do everything possible to help you avoid these mistakes, it’s important for you to know what they are and how to avoid them. Many errors can be avoided by filing electronically, which is how we file all the returns we complete.

#1: Don’t File Too Early

While you don’t want to file late, you should avoid filing as soon as the IRS begins accepting returns (January 24 this year). If you file before you receive all the necessary tax reporting documents, you risk making mistakes, incurring processing delays or even reducing your refund.

#2: Check Your Details

Missing or inaccurate Social Security numbers will cause problems, so beware of transposing numbers. Likewise, the names listed on your tax return should match the names on each person’s Social Security card.

#3: Gather All Your Paperwork

Wages, dividends, bank interest and other income received must all be entered (and added up correctly). We’ll need copies of all your information returns (i.e., W-2s, 1099s, etc.) to be sure nothing is left out.

#4: Know Your Filing Status

It’s possible to choose (and use) the wrong tax-filing status, especially if more than one filing status applies. Let us help you determine the best filing status for your situation. (See the article below for more details.)

#5: Double-Check the Math

Math errors are some of the most common mistakes, and they typically occur if you’re still filing your taxes by mailing in a paper return. We use professional-level tax-filing software and file electronically, which eliminates these types of errors. Input errors can still occur, so we always double-check the math — and ask you to do the same.

#6: Figure Credits and Deductions

With such intricate tax laws, it’s easy to overlook money-saving credits and deductions — Earned Income Tax Credits, Child and Dependent Care Credits, Child Tax Credits, Recovery Rebate Credits and others. We’ll make sure that you get credit for each and every possible deduction so you don’t pay more in taxes than required.

#7: Verify Bank Account Numbers

If you are due a refund, you should choose direct deposit to get your money quick and easy. However, be sure to include the correct routing and account numbers on your tax return, especially if you’ve recently changed banks or accounts.

#8: Sign Your Return

Your tax return must be signed to be valid. For a joint return, both spouses must sign unless one spouse is a member of the armed forces or there’s a valid power of attorney. When you file electronically, you can “digitally” sign your return before sending it to the IRS.

Avoid Costly Errors

When we process and file your tax return, we look at every possible way to save you money, while also ensuring that everything is done correctly and on-time. The more information you can give us — and the sooner you can do so — will ensure the best possible outcome.

We have begun processing 2021 federal and state tax returns. When you’re ready, you may drop off your paperwork at our office during regular business hours. We also have an after-hours dropbox out front to make it even more convenient. If you have an unusual situation or questions, please don’t hesitate to contact us at 706-632-7850 or email our office manager, Kimberly Mortimer, at kimberly@premiercpaservices.com.

We ask that you use our 2021 Tax Preparation Checklists (Personal and/or Business) to help make sure you’ve gathered all the necessary documents. Just click here to download:

Do You Know Your Correct Filing Status?

Your tax-filing status typically depends on whether you are considered married or unmarried on December 31, 2021. But more than one filing status may apply, so you can typically choose the one that allows you to owe the least amount of tax.

Five Tax-Filing Statuses

Your filing status affects whether you must file a federal tax return, your standard deduction amount, various tax credits and more. Familiarize yourself with each of these five options to choose your correct filing status.

  • Single. This applies if you are unmarried, divorced or legally separated.
  • Married filing jointly. If you are married, you can file a joint tax return with your spouse. If your spouse died in 2021, you can still use married filing jointly as your filing status for 2021 in most cases.
  • Married filing separately. If you are married, you can choose to file a separate tax return from your spouse. Choose this if you want to be responsible only for your own tax, or if it results in less tax than filing a joint return.
  • Head of household. If you are unmarried, you may be able to file using this status in certain circumstances. For example, you must have paid more than half the cost of keeping up a home for yourself and a qualifying person living in your home for at least half the year.
  • Qualifying widow or widower with dependent child. This status applies if your spouse died in 2019 or 2020, you didn’t remarry before the end of 2021, and you have a dependent child. Other conditions may also apply.

We can help you determine the correct — and most tax-advantageous — filing status for your situation. If you have any questions or are unsure of your status, contact us today. You can also use the IRS Interactive Tax Assistant to help determine your filing status.

Money Minute: New Child Bonus

Do you have a new baby? If you are a parent or guardian who added a child to your family last year, you may be eligible to receive up to $1,400 by claiming the Recovery Rebate Credit. This applies if you did not receive a third-round Economic Impact Payment for that child.

Money Minute: Adoption Tax Credit

If you adopted or started the adoption process last year, you may qualify for the Adoption Tax Credit. This applies to international, domestic, private, and public foster care adoption. (It does not apply if you adopt your spouse’s child.) The maximum credit is $14,440 per eligible child, depending on your income. An eligible child must be younger than 18, or physically unable to take care of themselves if older than 18.

IRS Video Tax Tip

Families may be eligible for various tax credits, such as the Earned Income Tax Credit, the Child Tax Credit, and the Child and Dependent Care Credit.

2021 Tax Preparation Checklists Now Available

2021 Tax Preparation Checklists Now Available

Help yourself (and us!) make tax preparation easier by using these handy Checklists to pull together your tax materials for 2021. With another year of tax law changes and new programs, these Checklists will ensure you’ve got everything you need to file.

Please click on the Checklist name below to download a copy of the checklist. If you prefer, we can email it to you (just call or email Kimberly at kimberly@premiercpaservices.com to request your copy). You can also download both forms here.
Remember: We’re back open on Fridays now for the busy tax preparation season. Please contact us with any questions or concerns you may have.

Venmo, PayPal and Cash App to Begin Reporting Payments of $600+

If you rely on payment apps like Venmo, PayPal and Cash App for your business, you should be aware of a new tax law that took effect this year. Third-party payment processors will now report your business transactions to the IRS if they exceed $600 for the year — and send you a Form 1099-K with this information. (Previously they were required to send you Form 1099-K if your gross income exceeded $20,000 or you had 200 separate transactions within a calendar year.)

The new rule applies to payments for goods and services transactions — NOT for personal payments to your roommate for rent, for example, or to a friend when splitting dinner costs.

Note that you should already be reporting income over $600 to the IRS on your 1040, whether or not you receive a Form 1099-K. This new rule just means the IRS will be able to cross-reference the amounts beginning with your 2022 tax return.

 

Use ID.me for Easy IRS Access

The IRS is now using ID.me to help ensure the privacy and confidentiality of your information when using IRS tools, including:

If you already have an IRS user name, you may continue to use your existing credentials to sign-in — but you will be prompted to create an ID.me account for future access. To verify your identity with ID.me, you’ll need to provide a photo of an identity document, such as your driver’s license, state ID or passport. You’ll also need to take a selfie with a smartphone or a computer webcam. Once your identity is verified, you can securely and easily access IRS online services.

Tax Filing Begins Jan. 24

The IRS will begin accepting and processing 2021 tax year returns beginning next Monday, January 24. The IRS urges you to file electronically to speed processing and refunds — most people receive their refund within 21 days when they use direct deposit.

Note that the tax filing deadline will be April 18 — for both federal and Georgia income taxes. The due date is April 18 instead of April 15 because of the Emancipation Day holiday in the District of Columbia. If you request an extension, you will have until Monday, October 17, 2022, to file.

Money Brief: Report Virtual Currency Transactions

If you received, sold, exchanged or otherwise disposed of any financial interest in virtual currency — like Bitcoin — you’ll need to provide us with that information so it can be included on your Form 1040.

Money Brief: UGA Business Webinars

UGA’s Small Business Development Center offers a wide variety of online training programs to help new business owners, such as “Writing a Business Plan,” “QuickBooks” and “Hiring to Win.” Register today to learn more about operating your small business.

2022 Calendar: Know Your Tax Dates & Deadlines

2022 Calendar: Know Your Tax Dates & Deadlines

We will be developing a new Tax Checklist to help you pull together your tax preparation materials for 2021. We hope to have that ready in our next newsletter. Until then, please take note of these important tax-related dates for the new year:

Tuesday, January 18:

  • Pay estimated taxes for 4th quarter 2021.

Monday, January 31:

  • File Form W-2s and other wage statements if you are an employer.
  • Provide Form W-2s to employees, and Form 1099-MISC, Miscellaneous Income and Form 1099-NEC, Nonemployee Compensation to the appropriate recipients. (Note: If we are filing these forms for you, please get your information to us ASAP.)

Friday, April 1:

  • First RMD due if you turned age 72 in 2021

Monday, April 18*:

  • File your 2021 federal tax return and pay any tax due, or request a 6-month extension.
  • Pay estimated taxes for 1st quarter of 2022.
  • Contribute to your IRA for 2021.
  • Contribute to your HSA for 2021.
  • Contribute to your 401(k) or SEP for 2021 if self-employed.

Wednesday, June 15:

  • Pay estimated taxes for 2nd quarter 2022.

Thursday, September 15:

  • Pay estimated taxes for 3rd quarter 2022.

Monday, October 17:

  • File your 2021 federal tax return if you requested an extension.

 *April 15th is Emancipation Day, a legal holiday in Washington, DC.

 

Important Letters Coming Your Way

If you received advance payments of the Child Tax Credit last year, keep an eye out for Letter 6419 from the IRS. The letter includes the total amount of Advance Child Tax Credit payments you received, if any, in 2021. Note that if you chose NOT to receive advance payments, you can claim the full child tax credit when you file your 2021 tax return. 

If you didn’t qualify for the third Economic Impact Payment (EIP or “stimulus check”), or you didn’t receive the full amount, you may be eligible for the Recovery Rebate Credit when you file your 2021 tax return. The IRS will soon send you Letter 6475, which contains the total amount of the third stimulus payment you received.

We will need a copy of these letters to prepare your 2021 tax return.

Tax Appointments

We’re taking tax appointments now if you’re a new client or have major changes to your taxes. Plan ahead and call 706-632-7850 to reserve your spot. Note that you do NOT need an appointment for us to handle your tax preparation — you can just drop off your files when you’re ready.

2022 Mileage Rates

The IRS updated mileage rates for 2022 based on rising fuel prices and other costs:

  • 58.5 cents per mile for business use (up 2.5 cents per mile).
  • 18 cents per mile for either medical or moving purposes for qualified active-duty members of the Armed Forces (up 2 cents per mile).
  • 14 cents per mile in service of charitable organizations (no change from 2021).

Note that if you choose to use the standard mileage rate, you must opt to use it in the first year the vehicle is available for business use. Then, in later years, you can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period if the standard mileage rate is chosen.

Corporate Registration Due by April 1

If you own a business in Georgia, you must renew your corporate registration each year between January 1 and April 1. To do so, simply visit the registration page. Beware of misleading notices you may receive that offer to file your corporate registration for a higher cost than doing so yourself. It’s a quick process you can handle easily online.

Don’t Forget to Take Your RMD by Dec. 31

Don’t Forget to Take Your RMD by Dec. 31

December 31 is the deadline to take your required minimum distribution (RMD) for 2021. The RMD is the minimum amount you must withdraw from your retirement plan account annually starting with the year you reach 72 (in most cases). RMD amounts not withdrawn on time may be subject to penalties.

If you reached age 70½ in 2019 (your 70th birthday was June 30, 2019, or earlier), you did not have an RMD due for 2020, but you will have to take one by December 31, 2021. If you reached age 72 in 2021 (and your 70th birthday was July 1, 2019, or later), your first RMD is due by April 1, 2022.

The RMD is based on your account balance and life expectancy, which is calculated based on Uniform Lifetime Table III in Publication 590-B, Distributions from IRAs. You can also use the IRS’s online worksheets to figure your RMD.

RMD Rules Apply If You:

  • Have a traditional IRA,
  • Have a traditional SEP IRA,
  • Have a SIMPLE IRA, or
  • Participate in a workplace retirement plan, including a 401(k), Roth 401(k), 403(b) or 457(b) plan.

(Note that Roth IRAs do NOT require distributions while the original owner is alive.)

An IRA trustee or plan administrator will report the amount of the RMD to you, typically using Form 5498. As the IRA owner, you must calculate the RMD separately for each IRA you have. However, you can choose to withdraw the total amount from one or more of the IRAs. In contrast, RMDs required from workplace retirement plans must be taken separately from each plan. Not taking an RMD, or not withdrawing enough, could result in a 50% excise tax on the amount not distributed.

Did you know that you can make a qualified charitable distribution up to $100,000 directly from your IRA (other than a SEP or SIMPLE IRA) to a qualified charitable organization? It’s generally a nontaxable distribution made by the IRA trustee directly to a charitable organization. A qualifying deduction may also count toward your RMD requirement for the year.

2020 RMD Rules

Due to Covid tax law changes, an IRA owner or beneficiary who received an RMD in 2020 had the option of returning it to their account or other qualified plan to avoid paying taxes on that distribution. A 2020 RMD that qualified as a coronavirus-related distribution may be repaid over a 3-year period or have the taxes due on the distribution spread over three years. A 2020 withdrawal from an inherited IRA could not be repaid to the inherited IRA but may be spread over three years for income inclusion.

Tax Checklist Coming Soon

With the many tax changes over the past year, we expect another challenging tax season. So look for our checklist — coming next year — to help you gather your files and paperwork for us to prepare your taxes.

We’re taking tax appointments now if you’re a new client or have major changes to your taxes. Plan ahead and call 706-632-7850 to reserve your spot. Note that you do NOT need an appointment for us to handle your tax preparation — you can just drop off your files when you’re ready.

Money Brief: Out-of-pocket Classroom Expenses May Be Deductible

If you’re a teacher, chances are you dip into your own pocket to buy classroom supplies. And those expenses can add up fast. Fortunately, you may be able to deduct $250 of unreimbursed expenses ($500 for two educators filing jointly) on your federal tax return.

You qualify for the deduction if you:

  • Are a teacher (K-12), instructor, counselor, principal or aide.
  • Work at least 900 hours during the school year.
  • Work in a school that provides elementary or secondary education.

Qualified expenses include:

  • Professional development courses.
  • Books, supplies and supplementary materials.
  • Computer equipment and software.
  • Athletic supplies for health and physical education.
  • Personal protective equipment, disinfectant and other supplies used for the prevention of the spread of coronavirus.

IRS Video Tip:

Find out if you need to fill out a new Form W-4 to make sure you’re having enough federal tax withheld from your paycheck. For more information, go to https://www.irs.gov/withholding.

Plan Ahead: Consider These 8 Smart Tax Tips for Year-end 2021

Plan Ahead: Consider These 8 Smart Tax Tips for Year-end 2021

With only a few weeks left until the new year, it’s time to take a look at your year-end finances. There are a few things you can do before the calendar changes to get ready for the 2022 tax-filing season.

Your Year-End To-Do List

#1  Report changes — If you moved in 2021, notify the IRS of your new address. Name changes should be updated with the Social Security Administration.

#2 Renew expiring ITINs — If your Individual Taxpayer Identification Number is set to expire at the end of this year, be sure to renew it now. Visit the ITIN page for more details.

#3 Donate to charity — Even if you don’t itemize your deductions, the law now permits you to claim a limited deduction on your federal income tax returns for cash contributions made to certain qualifying charities. Singles and marrieds filing separate returns can claim a deduction of up to $300, while marrieds filing jointly can claim a maximum deduction of $600. Cash contributions include those made by check, credit card or debit card, as well as unreimbursed out-of-pocket expenses in connection with volunteer services to a qualifying charitable organization.

#4 Track Advance Child Tax Credit Payments — If you received advance payments in 2021, you will need to compare the amount of payments you received with the amount of the Child Tax Credit that you can claim on your tax return. If you received less than the amount that you’re eligible for, you’ll claim a credit for the remaining amount of Child Tax Credit. If you received more than you’re eligible for, you may need to repay some or all of that excess payment when you file. The IRS will send you Letter 6419 in January, which will provide the total amount of Advance Child Tax Credit payments that you received in 2021. Provide this letter to your tax preparer when you file.

#5 Check your Recovery Rebate Creidt — If you didn’t qualify for a third Economic Impact Payment (EIP) or did not receive the full amount, you may be eligible for the Recovery Rebate Credit. The IRS will send you Letter 6475 in January, which will provide the total amount of the third EIP and any Plus-Up payments that you received in 2021. You’ll need to provide this letter to your tax preparer when you file. Note that if you received the full amount of your third Economic Impact Payment, you don’t need to include any information about it when you file your 2021 tax return.

#6 Contribute to your retirement plan — Depending on your AGI, you may be able to take a tax credit of 50%, 20% or 10% of:

  • Contributions you make to a traditional or Roth IRA;
  • Elective salary deferral contributions to a 401(k), 403(b), governmental 457(b), SARSEP, or SIMPLE plan;
  • Voluntary after-tax employee contributions made to a qualified retirement plan (including the federal Thrift Savings Plan) or 403(b) plan;
  • Contributions to a 501(c)(18)(D) plan; or
  • Contributions made to an ABLE account for which you are the designated beneficiary.

Rollover contributions do not qualify for the credit. Also, your eligible contributions may be reduced by any recent distributions you received from a retirement plan or IRA, or from an ABLE account.

While the total salary deferral limit for 2021 is $19,500 ($26,000 if you’re 50+), only contributions of up to $2,000 qualify for the credit ($4,000 if married filing jointly), making the maximum credit $1,000 ($2,000 if married filing jointly). See the chart below for details.

There is not a maximum age for traditional IRA contributions, so you can continue to contribute to a traditional IRA at any age as long as you earn compensation. Also, the minimum required minimum distribution (RMD) age is now 72.

#7 Verify your withholding — Use the IRS’s tax withholding estimator to make sure your withholding and estimated taxes align with what you actually expect to pay. Keep in mind that most income is taxable, including unemployment compensation. If you received non-wage income like self-employment income, investment income, taxable Social Security benefits and, in some instances, pension and annuity income, you may be in danger of underpaying your taxes, which could result in penalties. In this case, you can make an end-of-the-quarter estimated tax payment or have additional taxes withheld from your next few paychecks.

#8 Make business purchases — If you own a business, consider purchasing some business supplies now to take the deduction in 2021. Everything from printer ink to a new laptop or desk can qualify as an eligible business expense. Also make sure to keep your receipts related to the temporary 100% business deduction for food or beverages from restaurants. The Taxpayer Certainty and Disaster Relief Act of 2020 added a temporary exception to the 50% limit on the amount that businesses may deduct for food or beverages. The temporary exception allows a 100% deduction for food or beverages from restaurants, as long as the expense is paid or incurred in 2021 or 2022.

Prep Now for a Smoother Tax-Filing Season

While 2021 was not as crazy as 2020, there are still many changes that will affect next year’s tax filing. Start gathering your paperwork now, so you’re ready to go when your Forms W-2, Forms 1099-Misc and other income documents start arriving in the mail. If you have any questions, we’re here to help — just call 706-632-7850 or email us.

Money Brief: Jan. 31, 2022, Deadline

Year-end wage and tax statements will be due on January 31, 2022. Mark your calendar if you are required to file:

  • Form W-2, Wage and Tax Statements;
  • Form W-3, Transmittal of Wage and Tax Statements;
  • Forms 1099-MISC, Miscellaneous Income; and
  • Forms 1099-NEC, Nonemployee Compensation.

Automatic extensions of time to file Forms W-2 are not available. If you need assistance filing any of these forms for your employees, please contact us as early in January as possible. You might want to get a head start now on verifying or updating employee information like names, addresses and Social Security numbers.

Money Brief: Inflation Adjustments for Tax Year 2022

The IRS recently announced inflation adjustments for the 2022 tax year (for returns filed in 2023).

Standard Deduction Increases:

  • To $25,900 for marrieds filing jointly (up $800).
  • To $12,950 for singles and marrieds filing separately (up $400).
  • To $19,400 for heads of household (up $600).

Marginal Rates:

  • 37% for singles with incomes greater than $539,900 ($647,850 for marrieds filing jointly);
  • 35% for singles over $215,950 ($431,900 for marrieds filing jointly);
  • 32% for singles over $170,050 ($340,100 for marrieds filing jointly);
  • 24% for singles over $89,075 ($178,150 for marrieds filing jointly);
  • 22% for singles over $41,775 ($83,550 for marrieds filing jointly);
  • 12% for singles over $10,275 ($20,550 for marrieds filing jointly).
  • 10% for singles at $10,275 or less ($20,550 for marrieds filing jointly).

IRS Video Tip:

With more taxpayers and tax preparers working remotely, identity thieves are trying to use COVID-19 to scare and scam people out of their identities or money. Everyone should remember to take basic steps to protect themselves.

What to Do If You Get a Letter from the IRS

What to Do If You Get a Letter from the IRS

Tax Return Deadline: May 17

While the IRS has extended the federal income tax filing due date for individuals to May 17, we can no longer accept returns to meet that deadline. If we have NOT yet received your paperwork, we will be happy to file an extension for you.

To help you prepare your files, please download a copy of our 2020 Personal Tax Preparation Checklist.

First of all, don’t panic! The IRS mails letters or notices for a variety of reasons, including if:

  • You have a balance due.
  • You are due a larger or smaller refund.
  • The IRS has a question about your tax return.
  • The IRS needs to verify your identity or that of a dependent.
  • The IRS is requesting additional information.
  • The IRS made changes to your tax return.

What to Do and Not Do

Follow these tips if you receive a notice from the IRS:

Don’t ignore the letter. Most IRS letters and notices are about your federal tax return or tax account. The notice or letter will explain the reason for contacting you and provide instructions on what to do.

Read the notice. Read the letter carefully and take the appropriate action. If the IRS changed your tax return, compare the information provided in the notice with the information in your original return. Generally, you do NOT need to contact the IRS if you agree with the notice.

Respond quickly. If the letter requires a response by a specific date, be sure to reply in a timely manner. This will minimize any additional interest and penalty charges, and preserve your right to appeal.

Pay any amount due. If you owe money, you should pay as much as you can, even if you cannot pay the full amount. You can pay online or apply for an Online Payment Agreement or Offer in Compromise. The IRS offers several payment options.

Keep a copy of the notice. Be sure to keep a copy of any notice or letter you receive with your other tax records. You may need these documents later.

Contact the IRS only if necessary. If you must contact the IRS by phone, use the number provided in the upper right-hand corner of the notice, and have a copy of your tax return and letter when calling. Typically, you only need to contact the IRS if you don’t agree with the information, if the IRS requests additional information, or if you have a balance due. Generally, it’s best if you write to the IRS at the address on the notice and keep a copy for yourself; allow at least 30 days for a response.

Beware of scams. The IRS will not contact you using social media or text message. The first contact from the IRS usually comes in the mail. If you are unsure if you owe money to the IRS, you can review your tax account information on IRS.gov.

 

We’re Here to Help

While getting a letter from the IRS in the mail can be intimidating, you don’t have to worry. If we prepared your taxes, we’ll help you respond to the IRS letter with the appropriate information. Just email us a copy of the letter you received. If you have any questions or concerns, please contact us. We’re here to help!

Reminder: Dine Out and Take a Tax Deduction

The Taxpayer Certainty and Disaster Relief Act of 2020 (enacted in December) temporarily allows a 100% business expense deduction for meals as long as the expense is for food or beverages provided by a restaurant. The previous deduction was limited to 50%. This provision is effective for expenses incurred from January 1, 2021, through December 31, 2022.

Should You Be Paying Excise Taxes?

An excise tax is imposed on the sale of specific goods or services, such as fuel, airline tickets, heavy trucks, highway tractors, tires and tobacco, or on certain uses, such as indoor tanning. Excise taxes typically help fund projects related to the taxed product or service, such as highway paving projects or airport improvements.

Depending on the good or service, excise tax may be imposed at the time of:

  • Import,
  • Sale by the manufacturer,
  • Sale by the retailer, or
  • Use by the manufacturer or consumer.

If you are subject to excise tax, you must file one or more of the following forms:

  • Form 720, Quarterly Federal Excise Tax
  • Form 2290, Heavy Highway Vehicle Use Tax
  • Form 8849, Claim for Refund of Excise Taxes, Schedules 1, 2, 3, 5, 6 and 8

If you’re unsure if your business should be paying and filing excise taxes, give us a call. We can help you determine your status and take care of any paperwork.

The Latest Tax Info You Need to Know

The Latest Tax Info You Need to Know

Tax Return Deadline Extended to May 17

The IRS has extended the federal income tax filing due date for individuals from April 15 to May 17. To accommodate the new deadline, we will accept returns until Thursday, April 15th. If we receive your paperwork AFTER April 15, we will file an extension for you. To help you prepare your files, please download a copy of our 2020 Personal Tax Preparation Checklist.

Note that the deadline for estimated tax payments has NOT changed. First quarter payments are still due on April 15.

The American Rescue plan, which was signed by President Biden on March 11th, and other tax law changes probably affected your finances and returns for both 2020 and 2021. Here are some of the details you need to know:

Contribution Deadlines Extended to May 17

In addition to extending the tax return filing deadline to May 17, the IRS has extended other deadlines that would normally fall on April 15. You now have until May 17, 2021, to make 2020 contributions to your:

  • Individual Retirement Arrangements (IRAs and Roth IRAs),
  • Health Savings Accounts (HSAs),
  • Archer Medical Savings Accounts (Archer MSAs), and
  • Coverdell Education Savings Accounts (Coverdell ESAs).

This new deadline also applies to the reporting and payment of any 10% additional tax due on 2020 distributions from IRAs or workplace-based retirement plans.

IRS to Review Returns, Issue Refunds for Unemployment Benefits

The IRS will automatically begin refunding money in May if you filed your 2020 tax return and reported unemployment compensation before the American Rescue Plan was passed. The new law allows taxpayers who earned less than $150,000 in modified AGI to exclude 2020 unemployment compensation up to $20,400 (married filing jointly) or $10,200 (other taxpayers).

If you already filed and figured your tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed. So there is no need to file an amended return unless the change makes you eligible for additional federal credits and deductions.

If we filed your tax return for you before March 11, we will automatically check it for additional credits and deductions, then let you know if an amended return should be filed. If we have not yet filed your taxes, we will take the new law into account for you. Please contact us if you have any questions about this.

3rd EIP Is Different from Earlier Payments

You may notice that the third Economic Impact Payment you receive(d) is different from the first and second payments. Here’s how:

• The 3rd EIP is an advance payment of the 2021 recovery rebate credit. The two earlier payments are advance payments of the 2020 recovery rebate credit. If you didn’t get a first or second EIP or got less than the full amounts, you may be eligible to claim the 2020 recovery rebate credit on your 2020 tax return.

• The 3rd EIP may be larger. You will receive up to $1,400 as a single taxpayer or $2,800 as a joint filer. If you have qualifying dependents, you will receive up to $1,400 per qualifying dependent.

• More dependents qualify. You will get a payment for all qualifying dependents claimed on your return, not just for children under age 17. This may include older family members like college students, adults with disabilities, parents and grandparents.

• Income phase-out amounts are different. You will not receive a 3rd EIP if your AGI exceeds:

  • $160,000 if married filing jointly or as a qualifying widow/er.
  • $120,000 if filing as head of household.
  • $80,000 if filing single or married filing separately.

• You may be eligible for additional funds. The amount of the 3rd EIP is based on your latest processed tax return (either 2020 or 2019). If it’s based on your 2019 return and is less than the full amount, you may qualify for a supplemental payment after your 2020 return is processed.

Small Businesses: Take Advantage of the Employee Retention Credit

The Employee Retention Credit was modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020, and applies to the first two calendar quarters of 2021. The changes include:

  • Increasing the maximum credit amount,
  • Expanding the category of employers eligible to claim the credit,
  • Modifying the gross receipts test,
  • Revising the definition of qualified wages, and
  • Revising the ability of employers to request an advance payment of the credit.

Eligible employers can claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after from January 1-June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum employee retention credit available is $7,000 per employee per calendar quarter, for a total of $14,000 per employee for 2021.

Employers can access the Credit for the 1st and 2nd calendar quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Small employers may request advance payment of the credit (subject to certain limits) on Form 7200, Advance of Employer Credits Due to Covid-19.

Note that the Employee Retention Credit is also available to eligible employers during the third and fourth quarters of 2021, thanks to the American Rescue Plan. The IRS will provide further guidance on this soon.

If you need assistance on how to calculate and claim the Employee Retention Credit, please contact us today.

American Rescue Plan Targets Help to Restaurants

American Rescue Plan Targets Help to Restaurants

Tax Return Deadline Extended to May 17

The IRS has extended the federal income tax filing due date for individuals from April 15 to May 17. To accommodate the new deadline, we will accept returns until Thursday, April 15th. If we receive your paperwork AFTER April 15, we will file an extension for you. To help you prepare your files, please download a copy of our 2020 Personal Tax Preparation Checklist.

Note that the deadline for estimated tax payments has NOT changed. First quarter payments are still due on April 15.

The $1.9 trillion coronavirus relief bill signed by President Biden on March 11, 2021, allocates help to struggling small businesses — especially restaurants — through grants, additional aid, and an expansion of existing credits such as the Employee Retention Tax Credit.

New Restaurant Revitalization Fund Provides Grants

The new law creates a $28.6 billion Restaurant Revitalization Fund (RRF) grant program. Hard-hit restaurants and bars can apply for grants up to $10 million based on lost gross revenue between 2019 and 2020. The vast majority of restaurants and bars will be able to apply for these grants, including those considered: “restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products.” Those not eligible for the grants include state- or local-government-owned entities, or owners with more than 20 restaurants, though most franchise operators will be eligible.

The Small Business Administration (SBA) will administer and disperse the RRF grants, but the program does not yet have a launch date. In the meantime, if you are a restaurant owner, you should register for the program using the System of Award Management (SAM) here. Also, work with us to prepare relevant paperwork that shows your gross revenue loss in 2020 as compared to 2019.

Employee Retention Tax Credit Extended

In the December 2020 coronavirus relief bill, Congress expanded the Employee Retention Tax Credit (ERTC) to help struggling small businesses for the first two quarters of 2021. The American Rescue Act further helps those same businesses by extending the ERTC for the third and fourth quarters of 2021. The ERTC provides up to $7,000 per employee per quarter for four quarters to help you keep your employees on the payroll.

PPP Deadline Extended to May 31

The Paycheck Protection Program application deadline was just extended, thanks to the passage of the PPP Extension Act. The application deadline is now May 31, 2021, extending the filing deadline for PPP applications by 60 days. It also provides an additional 30 days for the SBA to finish processing applications received by May 31.

If you have any questions about the new coronavirus relief law or other tax questions, please don’t hesitate to contact us. We’re here to help!

Key Due Dates

April 1: Fannin County business property tax report

April 1: Georgia Secretary of State business registration

April 15: Deadline to get your tax return files to us to avoid an extension

April 15: First quarter estimated tax payment

April 30: First quarter payroll tax report

May 17: Individual tax return

t

Where’s My Refund?

If you are expecting a refund and haven’t received it yet, you can use the IRS’s “Where’s My Refund?” tool to check the status. Just go to the IRS website or click here to begin. You can start checking your refund status within 24 hours after the IRS receives your e-filed return.

American Rescue Plan Features Several Tax Benefits

American Rescue Plan Features Several Tax Benefits

Please note: The new American Rescue Plan Act signed by President Biden last week includes some items — including unemployment income and healthcare premium assistance — that affect 2020 tax returns.

We will hold all tax returns until more info is released. Depending on how quickly the IRS acts, we may have to file an extension. We will keep you updated!

T he American Rescue Plan Act signed by President Biden last week includes several financial changes and quite a few tax provisions. Here’s a brief look at some of the more important items. We’ll look at them more in-depth in the coming weeks.

Stimulus Checks

A 3rd round of Economic Impact Payments (EIP) worth up to $1,400 per individual and dependent have already started going out. The EIP will begin to phase out for single taxpayers with AGIs of $75,000 and joint filers with AGIs of $150,000.

Unemployment Benefits

A $300-per-week supplement to federal unemployment benefits has been extended through September 6, 2021. Also, the first $10,200 in unemployment benefits are tax-free in 2020 for taxpayers making less than $150,000 per year. (This provision affects your current 2020 tax return as noted above!)

Child Tax Credit

The Child Tax Credit is expanded to provide a credit in advance of filing a return — the IRS will estimate each taxpayer’s child tax credit amount and pay it out monthly in advance from July through December 2021. The credit is also increased to $3,000 per child ($3,600 for children under 6), though the increase phases out above certain incomes.

Earned Income Tax Credit

Special rules now apply for individuals with no children: For 2021, the applicable minimum age is decreased to 19, except for students (24) and qualified former foster youth or homeless youth (18), and the maximum age is eliminated. The credit’s phaseout percentage and amounts are also increased.

Child & Dependent Care Credit

For 2021 only, this credit will be refundable. The credit will be worth 50% of eligible expenses, up to a limit based on income. The exclusion for employer-provided dependent care assistance is increased to $10,500 for 2021.

Family & Sick Leave Credits

The credits for sick and family leave originally enacted by the Families First Coronavirus Response Act are extended to September 30, 2021. The limit on the credit for paid family leave is increased to $12,000.

Employee Retention Credit

Originally enacted in the CARES Act, this credit is extended through the end of 2021, and allows eligible employers to claim a credit for paying qualified wages to employees.

COBRA Continuation Coverage

Eligible individuals may receive premium assistance in the form of a refundable tax credit; this applies to premiums and wages paid after April 1, 2021, and through September 30, 2021.

Premium Tax Credit

This credit is expanded for 2021 and 2022 by changing the applicable percentage amounts.

PPP Loans

Eligible companies that receive a first- or second-draw Paycheck Protection Program (PPP) loan after December 27, 2020, can now also receive a Shuttered Venue Operators Grant (SVOG). The amount of the SVOG will be reduced by the amount of PPP funds approved.

EIDLs

Targeted Economic Injury Disaster Loan grants received from the SBA are not included in gross income, and this exclusion from gross income will not result in a denial of a deduction, reduction of tax attributes, or denial of basis increase. Similar treatment is afforded SBA restaurant revitalization grants.

More to Come

In addition to many tax benefits, the new law allocates $50 billion in funding to benefit small businesses through a variety of programs, including EIDL advance payments and additional PPP funds. There is also money for state and local governments, schools, healthcare entities, vaccine distribution and COVID-19 testing.

Obviously, there is much to digest in the new legislation. We’ll be following up in future newsletters with more details on how it may affect you. In the meantime, please contact us with any questions you may have.

March 26 Last Day to Drop Off Tax Returns!

We are working hard to get to everyone’s returns! With all the law changes for 2020 we want to make sure everyone gets their maximum benefit due.

The deadline for dropping off your tax info to us is March 26. If all your info is to us by that date, we will complete your return by April 15.

If we receive your paperwork AFTER March 26, we will file an extension for you.

Thanks everyone for your patience!

To help you prepare your files, please download a copy of our 2020 Personal Tax Preparation Checklist.