The IRS indicated that the filing due date for individual tax returns and the due date for making tax payments due for the 2020 tax year is being automatically extended from April 15, 2021 to May 17, 2021. This announcement was contained in IRS New Release IR-2021-59, issued on March 17, 2021. The IRS has indicated that it will provide formal guidance in the coming days. The news release als...
As discussed in our post on March 11, 2021, the American Rescue Plan, which was enacted on March 11, 2021 provides a retroactive exclusion for unemployment benefits received during 2020 (up to $10,200 per taxpayer). The exclusion is available for taxpayers with adjusted gross income of under $150,000. When computing income for the purpose of this threshold, include all unemployment benefits re...
On March 10, 2021, the House of Representatives passed the American Rescue Plan Act of 2021, which had previously been passed by the Senate on March 6, 2021. The President is expected to sign it into law. Retroactive Exclusion of Certain Unemployment Benefits: As discussed in our post on March 9, 2021, the Act contains a provision that retroactively excludes up to $10,200 of unemployment ben...
On Saturday, March 6, 2021, the Senate passed its own version of a bill that contains many tax provisions. The bill differs from the earlier version passed by the House of Representatives, so it will still require another vote in the House before it can be enacted into law. The final provisions are expected to stay the same, but until the House vote, there is always the possibility of delays...
It is looking very likely that a new tax law will be enacted that includes a third round of stimulus/economic impact payments. While the final details of such payments will not be known until/unless the new tax law is enacted, practitioners can begin to plan to help clients maximize the benefits of such payments. So far, the bill that was passed by the House of Representatives on February 27...
At this time of year, practitioners exchange documents with clients on a daily basis. It is vital to keep such document exchanges secure, since most of these documents include very sensitive information. Text messages or an email attachment that is not encrypted with a password is extremely vulnerable to interception by identity thieves. Since many clients do not think about the need for suc...
In order to determine whether a client is eligible for the recovery rebate credit (discussed in our post on January 12, 2021), practitioners must know the amount of economic impact payments (EIPs) received by the client in/around April 2020 and again beginning in January 2021. IRS Notice 1444 shows the amount of the first EIP and Notice 1444-B shows the amount of the second EIP. If a client ...
As discussed in our December 22, 2020 post, the Consolidated Appropriations Act of 2021 clarified that expenses paid with funds from the Paycheck Protection Program (PPP) are fully deductible, even though the loans were or will be forgiven. The law also clarifies that the adjusted basis of owners of entities with PPP loans will be increased by the tax-free income resulting from the forgiveness...
Practitioners who have clients that prefer to make certain tax payments using a paper check need to be aware of certain mailing address changes made by the IRS. Form 1040-V For residents of New York, Connecticut, New Jersey, Pennsylvania and certain other states, Form 1040-V, Payment Voucher, for the 2020 tax year is now mailed to: Internal Revenue ServiceP.O. Box 931000Louisville, KY 40293-1000...
While many are focusing on preparing applications for second draw loans under the Payroll Protection Program (PPP), the Small Business Administration has issued a revised form for requesting forgiveness for PPP loans that borrowers have already received. The revision to Form 3508S creates a one-page forgiveness application that requires no documentation to be attached for borrowers who received ...
