Gross Prophets Tax & Representation Services

IRS Extends Additional 2021 Filing Season Deadlines to May 17 Did You Know? Recently, the IRS moved the deadline for individuals to file 2020 federal income tax returns and pay any tax due from April 15 to May 17, 2021. The same automatic extension now applies to several other key tax deadlines, including: DEADLINE FOR 2020 IRA CONTRIBUTIONS: If you have not reached your contribution limit for tax year 2020, you may continue to make 2020 contributions to traditional or Roth... IRAs up until May 17. Taxpayers also have until May 17 to pay any tax due on 2020 IRA distributions, including the 10% penalty on non-exempt early withdrawals. DEADLINE TO CLAIM 2017 TAX REFUNDS: If you are owed a federal tax refund for 2017, you have until May 17, 2021 to file any returns or amended returns necessary to claim the refund. FILING DEADLINE FOR CERTAIN FOREIGN TRUSTS: Foreign estates and trusts that file Form 1040-NR have until May 17 to meet their federal tax filing and payment requirements. Again, all of these deadline changes are automatic. You do not need to take any action in order to receive the extensions. As of now, one critical deadline for many taxpayers has NOT changed. The due date for making an estimated tax payment for the first quarter of 2021 remains April 15. You may need to make estimated tax payments if you have significant income that is not subject to paycheck withholding, such as interest, dividend or self-employment income. A tax professional can help you determine if you owe estimated taxes.

Common Tax Filing Errors Did You Know? (2/3) Every year, many taxpayers make mistakes on their returns that cause IRS processing delays. Some common errors may also result in paying too much or too little tax. A miscalculation in either direction can be costly, since the IRS may assess penalties for underpayment. The following mistakes often cause filers to pay the wrong amount of tax:... Math Mistakes: Even mathematicians sometimes make errors in simple addition and subtraction, and some of the calculations required for 1040 schedules can be complicated. Thoroughly double-check every bit of math on your return. Incorrect Filing Status (Single, Married Filing Jointly, etc.): The IRS will not accept a return showing a filing status that you are not eligible to claim. If you qualify for more than one status (for example, filing jointly or separately if you are married), the option you choose may significantly change your tax. The difference can be especially great for single taxpayers who qualify to file as a head of household. Make sure that you have not chosen a filing designation that causes you to pay more tax than you owe. To avoid costly mistakes, the IRS recommends having a tax professional prepare or check your return and file it electronically. A tax pro might also help you claim deductions and credits that you would otherwise miss.

Common Tax Filing Errors Did You Know? (1/3) Every year, many taxpayers make mistakes on their returns that cause IRS processing delays. Some common errors may also result in paying too much or too little tax. A miscalculation in either direction can be costly, since the IRS may assess penalties for underpayment. The following mistakes may not change your tax, but they can cause processing problems. The IRS may even withhold your refund until the errors are corrected.... Missing or Inaccurate Social Security Number (SSN): Even when filing electronically, many people mistype their SSNs and do not catch the error. If the SSN on your return does not match the number on your Social Security card, the IRS may not be able to process your return. Misspelled Name: Take your time when filling in every blank on your return, even your name. A misspelling or illegible writing can prevent proper processing. Incorrect Bank Account or Routing Number: Getting your return filed electronically and requesting direct deposit is the fastest way to get your refund, IF you provide accurate information. An error in your banking info can cause big headaches. Missing Signature: Remember that in most cases, couples filing jointly must both sign their return. To avoid costly mistakes, the IRS recommends having a tax professional prepare or check your return and file it electronically. A tax pro might also help you claim deductions and credits that you would otherwise miss.

IRS Has Begun Sending Stimulus Payments to Eligible Americans Did You Know? The IRS started sending out a third round of Economic Impact Payments (EIP3s, also called stimulus payments) shortly after the American Rescue Plan became law on March 11. The vast majority of eligible Americans will receive their payments automatically, usually by direct deposit. If a person entitled to an EIP3 has not provided current banking information to the IRS, their payment will be sent by m...ail as a check or prepaid debit card. In general, EIP3s are larger than previous EIPs sent in 2020 and 2021. The standard payment amount is $1,400 per person, plus $1,400 for each dependent. For example, an eligible married couple with two dependent children will receive 4 X $1,400 = $5,600. People qualify to receive EIP3s if they are U.S. citizens or resident non-citizens, have valid Social Security Numbers (SSNs), cannot be claimed as someone else's dependent, and have adjusted gross income (AGIs) below the limit. For single tax filers, the AGI limit to receive the full EIP3 amount is $75,000. Single taxpayers with AGIs of $80,000 or above will not receive an EIP3, while those with incomes between $75,000 and $80,000 (the "phase-out" range) will receive reduced payments. Joint tax filers qualify for the full EIP3 amount if their AGI is $150,000 or less, with the phase-out range going from $150,000 to $160,000. For Head of Household (HoH) tax filers, the AGI limit for a full EIP3 is $112,500, with the phase-out range ending at $120,000. As with Single individuals, HoH and joint filers with AGIs above the phase-out range will not receive EIP3s. You can use the IRS Get My Payment portal (link below) to check on the status of your EIP3. This tool can often provide the precise date when your payment will be deposited or mailed. Because payments are calculated and sent automatically, contacting the IRS will not speed up the process. Beware of scammers who claim that they can get your stimulus payment faster. IRS Get My Payment portal: https://www.irs.gov/coronavirus/get-my-payment

IRS Extends Filing and Payment Deadlines Due in April Did You Know? In response to the pandemic, the IRS has extended both the 2021 federal income tax filing and payment deadlines for individual taxpayers. Here are the important details: - The filing deadline for 2020 federal individual income tax returns has been automatically moved from April 15, 2021 to May 17, 2021.... - The payment deadline for individual taxpayers to pay their 2020 tax due has also been automatically extended from April 15, 2021 to May 17, 2021. This extension also applies to those who pay self-employment tax. - The same extension does not apply to estimated tax payments with the due date of April 15, 2021. (For most payers of estimated taxes, this is their first-quarter payment for 2021). Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension to October 15, but this does not include an extension to pay.

IRS & Treasury Delivering Second Round of Stimulus Payments Did You Know? Under the Coronavirus Response and Relief Supplemental Appropriations Act, the federal government has authorized a second round of 2020-2021 Economic Impact Payments (EIPs, also called stimulus payments) for many Americans. The IRS has already begun sending these new EIPs by direct deposit and mailed checks. In most cases, individuals with an adjusted gross income (AGI) of $75,000 or below will receiv...e a new EIP of $600. Joint filers with a combined AGI of $150,000 or less will generally get $600 apiece. In addition, many households may receive additional payments of $600 per qualifying child. Those with higher incomes may receive a smaller EIP or no payment at all. Note that dependents age 17 or older are not eligible for EIPs. The vast majority of eligible Americans, including everyone who received a previous 2020 EIP, should receive these new stimulus payments automatically. There is no need to call the IRS or your bank. Simply watch for a direct deposit to your bank account, an IRS check in the mail or, in some cases, a prepaid debit card in a white envelope bearing an official U.S. Treasury seal. For various reasons, some people who qualify for these EIPs may not receive automatic payments. If you believe you are entitled to a payment but do not receive one, a tax professional may help you claim the amount you are owed as a credit on your 2020 tax return.

Some Employees May Still Qualify to Deduct Business Expenses Did You Know? The Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the tax deduction for business expenses for most workers classified as employees. However, some employees may still qualify for a deduction by filing the proper form with their federal tax returns. Eligible school employees may claim the Educator Expense Deduction for up to $250 of unreimbursed expenses necessary for their work, such as classroom su...pplies. Qualifying for this deduction generally requires working for at least 900 hours a year as a teacher, principal, counselor or classroom aide at an elementary or secondary school. In addition, employees in the following categories may qualify to deduct business expenses: - Armed Forces reservists, that is, members of the Army and Air National Guards, along with members of the Army, Navy, Air Force, Marine Corps and Coast Guard Reserves - Qualified performing artists classified as employees, such professional dancers, actors and musicians employed by professional companies - State and local government officials categorized as fee-basis workers (typically, these officials must pay self-employment tax) - Employees with work expenses related to a physical or other impairment These employees may be eligible to deduct unreimbursed ordinary and necessary costs related to carrying on their business as employees. Qualifying expenditures might include travel, costumes, workspace adaptations or office supplies. A professional tax advisor can help you determine whether you qualify to deduct business expenses as an employee, and which forms you must file in order to do so.

'Tis the Season for Important Tax Paperwork Keeping your records organized will help make sure you don't miss out on valuable deductions when it is time to file. Some documents to be on the lookout for:... - Wage and income statements (like W-2 or 1099-MISC) - Health Insurance statements (like Form 1095) - Proof of qualifying educational expenses (like Form 1098-T) - Mortgage interest statements - Retirement distribution statements - Investment account statements - Charity donation receipts

IRS Warns of New Identity Theft Text Scam Related to COVID Stimulus Payments Ever since Congress authorized the U.S. Treasury to send Economic Impact Payments (EICs, also called stimulus payments) to millions of Americans during 2020, scammers have been seeking ways to use the program to steal EIPs and personal information. A new scam involves using text messages and a fake website to steal taxpayers' identities. Americans targeted in this scam receive a text message stating ...that they have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further action is required The message includes a link to a fake website that looks like the official IRS Get My Payment portal for EIPs. (A link to the legitimate IRS portal is included below.) Instead of going only to the IRS through an encrypted connection, any personal data entered into the bogus website (such as Social Security and bank account numbers) goes directly to the scammers. If you receive any text message similar to the one quoted above, it is a scam DO NOT RESPOND. The IRS does not send unsolicited text or email messages of this sort. To help the IRS and federal law enforcement track and close down this scam, you can take a screenshot of the text message and email it to [email protected]. Include the phone number where you received the text, the number that it came from, and the date and time of the incident (including your time zone) in your email message. In addition, federal agencies are reminding all Americans that the IRS does not and never has accepted gift cards as a form of payment for any tax-related purpose. Anyone claiming to represent the IRS who requests payment in gift cards is a scammer. Hang up immediately to stay safe and protect your personal data. Official IRS Get My Payment Portal for EIPs: https://www.irs.gov/coronavirus/get-my-payment

2020 Charitable Contributions Deduction Did You Know? Ordinarily, only taxpayers who itemize deductions may deduct charitable contributions on their federal tax returns. However, the CARES Act allows many people who do not itemize to claim a deduction for 2020 cash contributions to IRS-approved charities. Tax deductions lower a person's tax bill by reducing taxable income. In general, individuals and couples who do not itemize deductions may deduct up to $300 for cash contr...ibutions made to qualifying charitable organizations in 2020. Qualifying organizations include many nonprofits dedicated to educational, religious, literary, and disaster and hunger relief activities. The IRS provides an online search tool (link below) to help taxpayers determine whether a particular charity qualifies to receive tax-deductible donations. As a reminder for those who do itemize deductions, the CARES Act also sets the 2020 cash contributions itemized deduction limit at 100% of adjusted gross income (AGI) for most taxpayers, a temporary increase from the usual limit of 60% of AGI. Qualifying 2020 cash contributions in excess of the limit may be carried over as deductions for tax year 2021. A tax professional can help you determine whether your contributions qualify for these special rules, and how to claim your deduction if so. IRS Charitable Organizations Search Tool: https://www.irs.gov/charitie/tax-exempt-organization-search