Kathy Birdwell E.A. Tax Service

This is great news for those who have already filed.

Your tax return can still be prepared early. I am ready to accept and process returns as normal. The only difference is the actual date the IRS will start processing on their end. 2021 tax filing season begins Feb. 12; IRS outlines steps to speed refunds during pandemic WASHINGTON The Internal Revenue Service announced that the nation's tax season will start on Friday, Feb. 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.... The Feb. 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the Dec. 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 Feb. 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.

Stimulus Payment Update The IRS has been sending out the second round of stimulus payments. Unfortunately, the IRS made a mistake and sent millions of payments to the wrong accounts. Because of this, many taxpayers, including some of your clients, have not received their payment. We are working tirelessly with the tax software industry, our bank partners, and the IRS to get this money distributed to affected taxpayers as soon as possible. As announced today, the IRS is taking... immediate steps to redirect stimulus payments to the correct account for those affected. It is anticipated that many taxpayers will receive payments following this effort. For taxpayers who checked 'Get My Payment' and received a response indicating a direct deposit was to be sent to an account they do not recognize, the IRS advises them to continue to monitor their bank accounts for deposits. The IRS Newsroom will have the latest IRS updates on this issue: https://www.irs.gov/newsroom. See more

Happy New Year! It has been a rough 10 months and I hope to find you healthy and happy amid the chaos. Stimulus payments are arriving quickly. You may check for yours at WWW.IRS.GOV. I will have no additional information as to when or how it will arrive, just know it will follow the same path as the previous payment so please be patient. About 2 weeks after your first payment, you received a letter stating to keep for your tax records. The letter or an exact amount of ...each of the payments received will be required to file your taxes. BOTH payments will be reconciled on the 2020 tax return. I say reconciled, as it is not a taxable event. The Recovery Rebate Credit form will reconcile the payments to ensure the maximum amount eligible has been received. If you were shorted it will be recovered at this time. Although there will not be a general price increase this year, there will be an additional charge to file the required stimulus reconciliation. Alimony executed after 2018 or before 2019 but later modified, will not be included in your gross income for the payee nor will it be a deduction for the payor on the Federal 1040 but is still reportable and deductible for the California 540. Please be sure to make me aware of the amount and date of agreement each year. Unemployment is a new experience for many taxpayers this year. The full amount is taxable and must be reported. Please either bring in the 1099 from the EDD or be prepared to send a screenshot of the 1099 from the EDD website with your tax documents. Appointments will be different this year. We are trying to work virtually as much as possible. All clients with a cell phone already have a portal to send documents, review, print, pay, text, and email. You may go to WWW.KATHYBIRDWELLTAX.COM and then to Portal Login. The portal is fast, easy, convenient, and safe. Stephanie and I will still be in office to handle the documents and returns. Stephanie is my resident expert with the portal and will be available to walk you through difficulties should they arise. The only flaw with the portal is documents can only be signed on a computer or IPAD. We have measures in place to accept drop off documents as well as signing papers in person. We realize not everyone is comfortable with electronics and will work with you. Telephone calls and potentially ZOOM meetings are available if you feel it is needed. Once the IRS releases the recent form and regulation changes, they will forward the changes to the software companies. The software companies will then make the necessary changes to their programming. These changes take time and I hope to be up and running at full speed within the next couple of weeks. We will miss seeing your smiling faces and hope to be back to normal next year. I thank you in advance for your understanding and commitment to keeping us all healthy until this virus runs its course.

Stimulus payments have starting hitting bank accounts today. Please be patient as it’s only the first day.Stimulus payments have starting hitting bank accounts today. Please be patient as it’s only the first day.

Let’s hope this works well. It sounds like a great addition to the letters.

Senate Bill 1159 (SB 1159), signed by Governor Newsom, creates new reporting requirements regarding COVID-19, effective September 17, 2020. Under SB 1159, California employers with five (5) or more employees must report to their claims administrator via email or fax, any instance of which they are aware an employee tested positive for COVID-19, or risk substantial financial penalty by the State.