Newsletter
This Quarter’s Topics
Delays
Unemployment
PTC
Contributions
Child Tax Credit
PIN’s
Meals
Thank you for your support this past year! For those of you who made contributions – we could not do it without you! And for those of you who pray for us – thank you so very much!
Delays
THERE IS A BACKLOG OF UNPROCESSED TAX RETURNS.
The IRS still has millions of 2019 tax returns waiting to be processed. In addition, there are now over 29 million 2020 tax returns in the queue. To further complicate the situation, the late passage of several tax laws did not allow time for the IRS to update their computer systems, therefore there are items which will need to be checked manually. Delays will be increased by other demands being placed on the IRS (such as sending out stimulus checks, returning funds to those who filed before congress decided not to tax a portion of unemployment, coordinating the advance payment of the additional child tax credit, returning PTC repayment, etc.). The IRS is being asked to do a difficult job with no increase in resources. Please be patient and DO NOT refile your return.
Unemployment
The first $10,200/per person of unemployment benefits are not taxed on the 2020 tax return. This was a late decision (March 31st). The IRS is asking those who filed and paid tax on all of their unemployment NOT to file an amendment. The IRS plans to program their computers to issue refunds
beginning in May.
PTC
For those who obtain health insurance thru one of the federal/state marketplace websites:
In a late decision (4/9/21) congress decided that individuals need not pay back any excess subsidy. For those who paid when they filed, the IRS plans to issue refunds with NO NEED to amend.
Contributions
On our 2021 questionnaire be sure to fill in your charitable contributions even if you do not itemize. Beginning next year there will be a $600 adjustment to income for those filing jointly with charitable contributions of at least that amount ($300 single).
Child Tax Credit
In 2021 the child tax credit will increase to $3,000 for every child under the age of 18 ($3,600 under 6). The IRS hopes to issue advance payments of the additional child tax credit. Any advance amount received will need to be reported on the 2021 tax return. There will be a place to fill this amount in on our 2021 questionnaire. You may choose to opt out of advance payments if:
1. You are concerned the IRS might accidentally send you too much and you do not want to have to worry about paying it back.
2. You don’t want to deal with updating changes to your financial information in the internet portal that the IRS plans to open by July 1.
3. You’d rather have one large credit on your 2021 tax return.
You will have the option to opt out using the IRS internet portal which should be available beginning July 1.
PIN’s
If you have a PIN number issued by the IRS you must fill that in yourself on your tax return. Do not share your PIN with anyone – not even us!
Meals
100% of meals obtained from restaurants can be a business expense in 2021 and 2022. The 50% limit does not apply. This does not include pre-packaged food from grocery and convenience stores.
Sincerely in Christ,
James W. Rickard
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