Lagniappe Accounting, Inc.

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Taxpayers shouldn’t believe these myths about federal tax refunds Now that many taxpayers have filed their federal tax returns, they're eager for details about their refund. When it comes to refunds, there are several common myths that can mislead taxpayers. Getting a refund this year means there's no need to adjust withholding for 2021...Continue reading

IRS suspends requirement to repay excess advance payments of the 2020 premium tax credit The premium tax credit helps pay for health insurance coverage bought from the Health Insurance Marketplace. Eligible people can choose to have all, some, or none of the estimated credit paid in advance directly to their insurance company on their behalf. These payments which are called advance payments of the premium tax credit, advance credit payments, or APTC lower what taxpayers p...Continue reading

Restaurant Revitalization Grants open up (04-20-21) The SBA has updated its website to provide additional information and guidelines regarding Restaurant Revitalization Grants. The grant amount is generally based on the amount of loss a restaurant incurred between 2019 and 2020, less any PPP loans received. These grants are excluded from gross income on the federal return. An online application portal is available on the SBA’s website (http://restaurants.sba.gov/), but it has... not yet been activated and to date the SBA has not stated when the portal will open. Here are some key takeaways from the guidelines and program information provided on the SBA’s website: Applicants may apply: Through recognized SBA restaurant partners (certain tech companies that provide support to the restaurant industry, e.g., POS and other back office services); Using the SBA’s online portal (not yet open); or By calling the SBA at (844) 279-8898 (only for use by those who do not have internet access). Any grants provided must be used by March 11, 2023; Although bakeries, brewpubs, tasting rooms, taprooms, breweries, wineries, distilleries, and inns are eligible for the grants, they must be able to document that at least 33% of their 2019 gross receipts were attributable to on-site sales to the public (if not open in 2019, the business model must contemplate 33% of on-site sales); The following businesses are ineligible: Permanently closed restaurants; Businesses that have filed a Chapter 11, 12, or 13 bankruptcy and are not operating; Businesses that have filed a Chapter 7 bankruptcy; Businesses that as of March 13, 2020, own or operate (together with any affiliated business) more than 20 locations, regardless of name or type of business at those locations; Businesses that received a shuttered venues operators grant or who have a pending application for a shuttered venues operators grant; Nonprofit organizations; All publicly traded companies; and Businesses applying for less than $1,000 in grants or more than $5 million per location; Restaurants opening soon are eligible as long as they have incurred expenses as of March 11, 2021; Applications will take about 14 days to process; and During the first 21 days of the program, funds will only be distributed to those businesses who are majority owned by women, veterans, or socially and economically disadvantaged individuals. A sample application is available here: www.sba.gov//SBA%20Form%203172%20RRF%20Application%204.20. The SBA's Restaurant Revitalization Funding Program guide is available here: www.sba.gov//2021.04.20%20-%20Restaurant%20Revitalization% Additional program information is available at: www.sba.gov//covid-19-reli/restaurant-revitalization-fund

SPIDELL Tax Analysis Education IRS processing delays for April electronic debits (04-21-21) The IRS has stated that they are behind in withdrawing funds for first quarter estimated tax and extension payments made through auto withdrawals on or around April 15. This is why many practitioners have been notified by their clients that April payments have not been withdrawn from their accounts though the payments were properly scheduled. According to the IRS, this is not a tax... software issue. It is the IRS who has been delayed in making the withdrawals from taxpayers’ accounts, and they are making the issue a priority. The problem is not just estimated taxes but all auto withdrawals made on or around April 15. According to the IRS, there will not be any penalties for these late withdrawals, and no action is required by the taxpayers. The IRS is expected to release a Quick Alert on this topic soon.

Steer clear of typical tax return errors; May 17 deadline nears Some mistakes on tax returns can slow refunds WASHINGTON The Internal Revenue Service today reminded taxpayers to check their tax returns for common errors that could delay refunds or otherwise affect normal processing. Here are some ways to avoid tax return slipups as the May 17 due date gets closer. Use electronic filing. Filing electronically, whether through IRS Free File or other e-file service providers, ...Continue reading

Taxpayers should file their tax return on time even if they can’t pay their tax bill in full Taxpayers should file their tax return by the deadline even if they cannot pay the full amount due. If an individual taxpayer owes taxes, but can't pay in full by the May 17, 2021 deadline, they should:... File their tax return or request an extension of time to file by the May 17 deadline. People who owe tax and do not file their return on time or request an extension may face a failure-to-file penalty for not filing on time. Taxpayers should remember that an extension of time to file is not an extension of time to pay. An extension gives taxpayers until October 15, 2021 to file their 2019 tax return, but taxes owed are still due May 17, 2021. To get an extension to file, taxpayers must do one of the following: File Form 4868 through their tax professional, tax software or using Free File on IRS.gov. Submit an electronic payment with Direct Pay, Electronic Federal Tax Payment System or by debit, credit card or digital wallet and select Form 4868 or extension as the payment type. Pay as much as possible by the May 17 due date. Whether filing a return or requesting an extension, taxpayers must pay their tax bill in full by the May deadline to avoid interest and penalties. People who do not pay their taxes on time will face a failure-to-pay penalty. The IRS has options for taxpayers who can't afford to pay taxes they owe. Set up a payment plan as soon as possible. Taxpayers who owe but cannot pay in full by May 17 don't have to wait for a tax bill to set up a payment plan. They can apply for a payment plan on IRS.gov. Taxpayers can also submit a payment plan request using Form 9465, Installment Agreement Request More information: IRS extends additional tax deadlines to May 17 What Is the Due Date of My Federal Tax Return or Am I Eligible to Request an Extension? Tax Topic 653, IRS Notices and Bills, Penalties, and Interest Charges

Do’s and don’ts for taxpayers who get a letter or notice from the IRS The IRS mails letters or notices to taxpayers for a variety of reasons including if: They have a balance due. They are due a larger or smaller refund.... The agency has a question about their tax return. They need to verify identity. The agency needs additional information. The agency changed their tax return. Here are some do's and don'ts for taxpayers who receive one: Don't ignore it. Most IRS letters and notices are about federal tax returns or tax accounts. The notice or letter will explain the reason for the contact and gives instructions on what to do. Don't panic. The IRS and its authorized private collection agencies generally contact taxpayers by mail. Most of the time, all the taxpayer needs to do is read the letter carefully and take the appropriate action. Do read the notice. If the IRS changed the tax return, the taxpayer should compare the information provided in the notice or letter with the information in their original return. In general, there is no need to contact the IRS if the taxpayer agrees with the notice. Do respond timely. If the notice or letter requires a response by a specific date, taxpayers should reply in a timely manner to: o minimize additional interest and penalty charges. o preserve their appeal rights if they don’t agree. Do pay amount due. Taxpayers should pay as much as they can, even if they can’t pay the full amount. People can pay online or apply for an Online Payment Agreement or Offer in Compromise. The agency offers several payment options. Do keep a copy of the notice or letter. It’s important to keep a copy of all notices or letters with other tax records. Taxpayers may need these documents later. Do remember there is usually no need to call the IRS. If a taxpayer must contact the IRS by phone, they should use the number in the upper right-hand corner of the notice. The taxpayer should have a copy of their tax return and letter when calling. Typically, taxpayers only need to contact the agency if they don’t agree with the information, if the IRS request additional information, or if the taxpayer has a balance due. Taxpayers can also write to the agency at the address on the notice or letter. If taxpayers write, they should allow at least 30 days for a response. Do avoid scams. The IRS will never contact a taxpayer using social media or text message. The first contact from the IRS usually comes in the mail. Taxpayers who are unsure if they owe money to the IRS can view their tax account information on IRS.gov. More Information: Understanding Your IRS Notice or Letter Tax Topic 651, Notices What to Do Tax Topic 653, IRS Notices and Bills, Penalties, and Interest Charges Tax Topic 654, Understanding Your CP75 or CP75A Notice Request for Supporting Documentation See more

Taxpayers should use the correct filing status for accuracy and to avoid surprises Taxpayers need to know their correct filing status and be familiar with each option. The IRS Interactive Tax Assistant can help them determine their filing status. A taxpayer's filing status typically depends on whether they are single or married on Dec. 31, which determines their filing status for that entire year. More than one filing status may apply in certain situations. If this is the cas...e, taxpayers can usually choose the filing status that allows them to owe the least amount of tax. When preparing and filing a tax return, the filing status affects: If the taxpayer is required to file a federal tax return If they should file a return to receive a refund Their standard deduction amount If they can claim certain credits The amount of tax they should pay Here are the five filing statuses: Single. Normally, this status is for taxpayers who are unmarried, divorced or legally separated under a divorce or separate maintenance decree governed by state law. Married filing jointly. If a taxpayer is married, they can file a joint tax return with their spouse. When a spouse passes away, the widowed spouse can usually file a joint return for that year. Married filing separately. Married couples can choose to file separate tax returns. When doing so, it may result in less tax owed than filing a joint tax return. Head of household. Unmarried taxpayers may be able to file using this status, but special rules apply. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person living in the home for half the year. Qualifying widow or widower with dependent child. This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child. Other conditions also apply. More Information: Publication 501, Dependents, Standard Deduction, and Filling Information See more

Here’s how people can pay their federal taxes The May 17 deadline for individuals to file and pay their federal income tax is fast approaching. While paying taxes is not optional, people do have options when it comes to how they pay taxes. The IRS offers a variety of ways to pay taxes. Some taxpayers must make quarterly estimated tax payments throughout the year. This includes sole proprietors, partners, and S corporation shareholders who expect to owe $1,000 or more when the...y file. Individuals who participate in the gig economy might also have to make estimated payments. The deadline to pay estimated taxes remains April 15, 2021. Here are five ways for people who need to pay their taxes. They can: Pay when they e-file using their bank account, at no charge, using electronic funds withdrawal. Use IRS Direct Pay which allows taxpayers to pay electronically directly from their checking or savings account for free. They can choose to receive email notifications about their payments when they pay this way. Taxpayers should watch out for email schemes. IRS Direct Pay sends emails only to users who request the service. Pay using a payment processor by credit card, debit card or digital wallet options. Taxpayers can make these payments online, by phone or through the IRS2Go app. Make a cash payment at more than 60,000 participating retail locations nationwide. To pay with cash, visit IRS.gov and follow the instructions. Pay over time by applying for an online payment agreement. Once the IRS accepts an agreement, the taxpayers can make their payment in monthly installments.

Treasury, IRS provide guidance on tax relief for deductions for food or beverages from restaurants Businesses can temporarily deduct 100% beginning Jan. 1, 2021 WASHINGTON The Treasury Department and the Internal Revenue Service today issued Notice 2021-25 providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020. The Act 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. Beginning Jan. 1, 2021, through Dec. 31, 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances. Where can businesses get food and beverages and claim 100%? Under the temporary provision, restaurants include businesses that prepare and sell food or beverages to retail customers for immediate on-premises and/or off-premises consumption. However, restaurants do not include businesses that primarily sell pre-packaged goods not for immediate consumption, such as grocery stores and convenience stores. Additionally, an employer may not treat certain employer-operated eating facilities as restaurants, even if these facilities are operated by a third party under contract with the employer. More information for business seeking coronavirus related tax relief can be found at IRS.gov.

IRS will recalculate taxes on 2020 unemployment benefits and start issuing refunds in May Normally, any unemployment compensation someone receives is taxable. However, a recent law change allows some recipients to not pay tax on some 2020 unemployment compensation. The IRS will automatically refund money to eligible people who filed their tax return reporting unemployment compensation before the recent changes made by the American Rescue Plan. These refunds are expected to b...egin in May and continue into the summer. Under the new law, taxpayers who earned less than $150,000 in modified adjusted gross income can exclude some unemployment compensation from their income. This means they don’t have to pay tax on some of it. People who are married filing jointly can exclude up to $20,400 up to $10,200 for each spouse who received unemployment compensation. All other eligible taxpayers can exclude up to $10,200 from their income. Information for people who already filed their 2020 tax return This law change occurred after some people filed their 2020 taxes. For taxpayers who already have filed and figured their 2020 tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation. Any resulting overpayment of tax will be either refunded or applied to other taxes owed. The agency will do these recalculations in two phases. First, taxpayers who are eligible to exclude up to $10,200. Second, those married filing jointly who are eligible to exclude up to $20,400, and others with more complex returns. Taxpayers only need to file an amended return if the recalculations make them newly eligible for additional federal tax credits or deductions not already included on their original tax return. For example, the IRS can adjust returns for taxpayers who claimed the earned income tax credit and, because the exclusion changed their income level, may now be eligible for an increase in the EITC amount. However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but are now eligible to claim them following the change in the tax law. Taxpayers can use the EITC Assistant to see if they qualify for this credit based upon their new taxable income amount. If they now qualify, they should consider filing an amended return to claim this money. These taxpayers may want to review their state tax returns as well. Information for people who haven’t filed their 2020 tax return Tax preparation software has been updated to reflect these changes. People who haven’t yet filed and choose to file electronically, simply need to respond to the related questions when preparing their tax returns. These taxpayers should read New Exclusion of up to $10,200 of Unemployment Compensation for information and examples. For those who choose to file a paper return, instructions and an updated worksheet about the exclusion are available on IRS.gov. See more

IRS reminds taxpayers to make April 15 estimated tax payment WASHINGTON The Internal Revenue Service today reminded self-employed individuals, retirees, investors, businesses, corporations and others who pay their taxes quarterly that the payment for the first quarter of 2021 is due Thursday, April 15, 2021. The extension to May 17, 2021 for individuals to file their 2020 federal income taxes does not apply to estimated tax payments. The 2021 Form 1040-ES, Estimated Tax for ...Continue reading

IRS, Treasury disburse 25 million more Economic Impact Payments under the American Rescue Plan Social Security and other beneficiaries bring total to more than 156 million payments; VA beneficiaries’ payments to be disbursed on April 14 WASHINGTON Today, the Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced they are disbursing more than 25 million payments in the fourth batch of Economic Impact Payments from the Am...Continue reading

IRS extends additional tax deadlines to May 17 Following the extension of the filing and payment deadline for individuals to May 17, 2021, the IRS announced other tax deadline extensions to the same date. Here’s what’s affected:... Contributions to IRAs and health savings accounts People now automatically have until May 17, 2021, to make 2020 contributions to their: Individual retirement arrangements Health savings accounts Archer medical savings accounts Coverdell education savings accounts The deadline for reporting and paying the 10% additional tax on amounts included in gross income from 2020 distributions from IRAs or workplace-based retirement plans is now May 17, 2021. Lastly, the due date for Form 5498 series returns related to these accounts is now June 30, 2021, 2017 unclaimed refunds The law provides a three-year window to claim a refund. Normally, April 15, 2021, is the deadline to claim a refund from tax year 2017 but, the IRS has extended it to May 17, 2021. To get the unclaimed refund, a taxpayer must properly address and mail the tax return, postmarked by May 17, 2021. If a taxpayer doesn’t file a return within three years, the money becomes property of the U.S. Treasury. Foreign trusts and estates Foreign trusts and estates with federal income tax filing or payment obligations, who file Form 1040-NR, now have until May 17, 2021. 2021 Annual Filing Season Program application deadline Tax return preparers who’d like to participate in the Annual Filing Season Program for calendar year 2021 now have until May 17, 2021, to file their application with the IRS. Tax professionals can learn more on the AFSP page on IRS.gov. No extension for estimated tax payments April 15, 2021 is still the deadline to make first quarter estimated tax payments. Withholding is automatic for most employees, but some taxpayers’ income isn't subject to income tax withholding. These taxpayers must generally make quarterly estimated tax payments. Income that may require estimated tax payments includes: Self-employment Interest Dividends Alimony Rentals Taxpayers should review IRS Notice 2021-21 for more information about these extensions.

Here’s how the third Economic Impact Payment is different from earlier payments The third Economic Impact Payment is different from the first and second payments in several ways. The third Economic Impact Payment is an advance payment of the 2021 recovery rebate credit. The two earlier payments are advance payments of the 2020 recovery rebate credit. Eligible people who didn't get a first and second Economic Impact Payment or got less than the full amounts, may be eligible ...Continue reading

Economic Impact Payments on their way, visit IRS.gov instead of calling WASHINGTON The Internal Revenue Service today urged people to visit IRS.gov for the most current information on the second round of Economic Impact Payments rather than calling the agency or their financial institutions or tax software providers. IRS phone assistors do not have additional information beyond what’s available on IRS.gov. The IRS and the Treasury Department began issuing a second round of ...Continue reading

IRS letters explain why some 2020 Recovery Rebate Credits are different than expected WASHINGTON As people across the country file their 2020 tax returns, some are claiming the 2020 Recovery Rebate Credit (RRC). The IRS is mailing letters to some taxpayers who claimed the 2020 credit and may be getting a different amount than they expected. It’s important to remember that the first and second Economic Impact Payments (EIP) were advance payments of the 2020 credit. Most eli...Continue reading

Inside This Issue Treasury and IRS begin delivering second round of Economic Impact Payments to millions of Americans WASHINGTON Today, the Internal Revenue Service and the Treasury Department will begin delivering a second round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans who received the first round of payments earlier this year....Continue reading

Second COVID Relief Package Passed Stimulus checks could mail as early as next week Both houses of Congress voted to pass the latest COVID relief legislation and all indications are that the president will sign it into law. We know that more guidance will be provided as this rolls out, but here are the highlights as we know them: PPP and small business support: Business expenses paid for with the proceeds of PPP loans are tax deductible, consistent with Congressional intent...Continue reading

IRS issues standard mileage rates for 2021 WASHINGTON The Internal Revenue Service today issued the 2021 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2021, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 56 cents per mile driven for business use, down 1.5 cents from the rate for 2020,... 16 cents per mile driven for medical or moving purposes for qualified active duty members of the Armed Forces, down 1 cent from the rate for 2020, and 14 cents per mile driven in service of charitable organizations, the rate is set by statute and remains unchanged from 2020. The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs. It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, unless they are members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Moving Expenses for Members of the Armed Forces. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen. Notice 2021-02 contains the optional 2021 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2021 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

Taxpayers who need last year’s tax return have several options Help is available for taxpayers who need tax information for prior years, but who didn’t keep copies of their returns. There are options for helping taxpayers get the information they need. Taxpayers should generally keep copies of their tax returns and any documentation for at least three years after they file. If taxpayers didn’t keep these records, here are some things they can do: Ask software provider or tax ...preparer Those who need a copy of their tax return should check with their software provider or tax preparer first. Prior-year tax returns are available from the IRS for a fee. Get a transcript Taxpayers who can’t get a copy of a prior-year return may order a tax transcript from the IRS. To protect taxpayers’ identities, this document partially masks personally identifible information such as names, addresses and Social Security numbers. All financial entries, including the filer’s adjusted gross income, are fully visible. These are free and available for the most current tax year after the IRS has processed the return. People can also get them for the past three years. Taxpayers ordering a transcript should allow time for delivery. Here are the three ways to get transcripts: Get Transcript online. People can use this tool to view, print or download a copy of all transcript types. Those who use it must authenticate their identity using the Secure Access process. Taxpayers who are unable to register or prefer not to use Get Transcript Online may use Get Transcript by Mail to order a tax return or account transcript type. Taxpayers should allow five to 10 calendar days for delivery. By phone. The number is 800-908-9946. By mail. Taxpayers can complete and send either Form 4506-T or Form 4506T-EZ to the IRS to get one by mail. They use Form 4506-T to request other tax records: tax account transcript, record of account, wage and income and verification of non-filing. These forms are available on the Forms, Instructions and Publications page on IRS.gov. Request a copy of a tax return from the IRS If necessary, taxpayers can request a copy of a tax return by completing and mailing Form 4506 to the IRS address listed on the form. There’s a $50 fee for each copy and these are available for the current tax year and up to six years prior. See more

Get Ready for Taxes: Stay home and stay safe with IRS online tools WASHINGTON The Internal Revenue Service today encouraged taxpayers to take necessary actions now to help file federal tax returns timely and accurately in 2021. This is the fourth in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A special page, updated and available on IRS.gov, outlines steps taxpayers can take to make tax filing easier in 2021....Continue reading

Oct. 15 deadline nears for taxpayers who requested tax filing extensions Taxpayers should file electronically and request direct deposit for refunds WASHINGTON The Internal Revenue Service today reminds taxpayers who filed an extension that the Oct. 15 due date to file their 2019 tax return is near. Taxpayers should file their tax returns on or before the Oct. 15 deadline. For those who still owe, pay as soon as possible to reduce any penalties and interest. Convenient elec...Continue reading

People experiencing homelessness may qualify for an Economic Impact Payment People experiencing homelessness may be eligible for a $1,200 Economic Impact Payment and $500 for each qualifying child under age 17. To get this payment, they must register with the IRS by Saturday, Nov. 21, 2020. If someone’s income is below $12,200, or $24,400 if they’re married, they probably don’t file a tax return. That means the IRS may not have enough information to issue their payment. To ge...t an Economic Impact Payment this year, these individuals need to register by Nov. 21. They do this by using the free Non-Filers: Enter Payment Info Here tool. It’s available in English and Spanish. People who don’t normally file a tax return may be eligible for an EIP if they: Are a U.S. citizen, permanent resident or qualifying resident alien Have a work-eligible Social Security number Cannot be claimed as a dependent of another taxpayer To use the tool, a person needs: Name, as it appears on Social Security card, for self and spouse, if they are eligible A work-eligible SSN for self and spouse, if they are eligible For each qualifying child, name, relationship and SSN or Adoption Tax Identification Number An email address to help create an account to use the Non-Filers tool A mailing address where they can receive the payment and a confirmation letter, which the IRS will mail within 15 days after issuing their payment Banking information, including routing and account numbers, if they want their payment by direct deposit An Identity Protection Personal Identification Number, if the IRS sent one in the past. If a person lost it, they can use the Get an IP PIN tool at IRS.gov to retrieve their number The Non-Filers tool asks for a user’s license or state ID number to digitally sign the document. There are other ways to do this, so an ID is optional in the tool. If someone wants their payment by direct deposit but doesn’t have a bank account, they can visit the FDIC website for help. The IRS will mail a payment to anyone who doesn’t give direct deposit information. Other key points about Economic Impact Payments The IRS highly recommends the online Non-Filers tool for the fastest Economic Impact Payment. People who can’t access or use the tool should follow the steps in the Non-Filers tool section of the Economic Impact Payment FAQs. They should submit their information to the IRS by Nov. 21. If someone misses the Nov. 21 deadline, they can claim the payment as a credit on a 2020 federal income tax return next year. The payment is not taxable income and getting one does not affect eligibility for other benefits, such as the Supplemental Nutrition Assistance Program, unemployment benefits or other benefit programs. People can use the Get My Payment tool at IRS.gov within two weeks to check their payment status. More information: Economic Impact Payment eligibility FAQs

Business owners should visit IRS.gov for help with tax actions when closing a business Closing a business is always a difficult decision regardless of the circumstances. With this in mind, the IRS redesigned the closing a business page of IRS.gov to help business owners navigate the federal tax steps when closing a business. Small businesses and self-employed taxpayers will find a variety of information on the page including: What forms to file How to report revenue rec...eived in the final year of business How to report expenses incurred before closure The page also details steps all business owners should take when closing. File a final tax return and related forms. The type of return to file and related forms depends on the type of business. Take care of employees. Business owners with one or more employees must pay any final wages or compensation, make final federal tax deposits and report employment taxes. Pay taxes owed. Even if the business closes now, tax payments may be due next filing season. Report payments to contract workers. Businesses that pay contractors at least $600 for services including parts and materials during the calendar year in which they go out of business, must report those payments. Cancel EIN and close IRS business account. Business owners should notify the IRS so they can to close the IRS business account. Keep business records. How long a business needs to keep records depends on what's recorded in each document. The page also provides helpful information for business owners declaring bankruptcy, selling their business and terminating retirement plans. See more

IRS extends Economic Impact Payment deadline to Nov. 21 to help non-filers WASHINGTON The Internal Revenue Service announced today that the deadline to register for an Economic Impact Payment (EIP) is now Nov. 21, 2020. This new date will provide an additional five weeks beyond the original deadline. The IRS urges people who don’t typically file a tax return and haven’t received an Economic Impact Payment to register as quickly as possible using the Non-Filers: Enter In...Continue reading

Taxpayers should know and understand their correct filing status Taxpayers need to know their correct filing status and be familiar with each option. Generally, the taxpayer's filing status depends on whether they are single or married on Dec. 31 and that determines their status for the whole year. However, more than one filing status may apply in certain situations. If this is the case, taxpayers can usually choose the filing status that allows them to pay the least amount o...f tax. When preparing and filing a tax return, the filing status affects: If the taxpayer is required to file a federal tax return If they should file a return in order to receive a refund Their standard deduction amount If they can claim certain credits The amount of tax they should pay Here's the five filing statuses: Single. Normally this status is for taxpayers who are unmarried, divorced or legally separated under a divorce or separate maintenance decree governed by state law. Married filing jointly. If a taxpayer is married, they can file a joint tax return with their spouse. When a spouse passes away, the widowed spouse can usually file a joint return for that year. Married filing separately. Married couples can choose to file separate tax returns. When doing so it may result in less tax owed than filing a joint tax return. Head of household. Unmarried taxpayers may be able to file using this status, but special rules apply. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person living in the home for half the year. Qualifying widow(er) with dependent child. This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child. Other conditions also apply. More Information: Publication 501, Dependents, Standard Deduction, and Filling Information

Here’s how to get the status of an Economic Impact Payment Eligible individuals can visit IRS.gov and use the Get My Payment tool to find out the status of their Economic Impact Payment. This tool will show if a payment has been issued and whether the payment was direct deposited or sent by mail. In certain situations, this tool will also give people the option of providing their bank account information to receive their payment by direct deposit. Information is updated once... a day, usually overnight, so there's no need to check it more than once a day. Here are some key things to know about this tool and who can use it. Before using the tool, people must verify their identity by answering security questions. If the answers do not match IRS records after multiple attempts, the user will be locked out of the tool for 24 hours. This is for security reasons. Those who can’t verify their identity won’t be able to use Get My Payment. If this happens, people should not contact the IRS. If the tool returns a message of payment status not available, this may mean the IRS can’t determine the person’s eligibility for a payment right now. There are several reasons this could happen. Two common reasons are: o A 2018 or 2019 tax return is not on file and the agency needs more information or, o The individual could be claimed as a dependent on someone else’s tax return. In some cases, if a taxpayer has filed their 2019 tax return but the IRS hasn’t processed it yet, they may receive payment status not available. Taxpayers who’ve already filed a tax return don’t need to take any action. The IRS continues to issue Economic Impact Payments as tax returns are processed. People who aren’t required to file a tax return and used the Non-Filers: Enter Payment Info Here tool to register for a payment can check the status of their payment using the Get My Payment tool. These individuals should wait two weeks after submitting their information. If they’re required to file a 2019 tax return and they used the Non-Filer tool, this may delay processing their tax return and their Economic Impact Payment. Recipients of SSA-1099, RRB-1099, SSI or VA benefits may not have filed a return or used the Non-Filer tool. These people can check Get My Payment for the status of their payment, if they can verify their identity. If a benefit recipient has not received their payment, the IRS might need more information. If these individuals can’t be claimed as a dependent and aren’t required to file a tax return, they should use the Non-filer tool to register for a payment. Most individuals receive only one payment, but there are some situations where they may receive an additional payment. This includes certain federal benefit recipients of Social Security, SSI, RRB or VA who may receive a catch-up $500 payment for each qualifying child. Get My Payment will show the status of their most recent payment. See more

How people can reconstruct records lost in a natural disaster Reconstructing records after a disaster is important for several reasons including insurance reimbursement and taxes. Most importantly, records can help people prove their disaster-related losses. More accurately estimated losses can help people get more recovery assistance like loans or grants. Whether it’s personal or business property that has been lost or destroyed, here are some steps that can help people reco...nstruct important records. Tax records Get free tax return transcripts immediately using the Get Transcript on IRS.gov or through the IRS2Go app. Order transcripts by calling 800-908-9946 and following the prompts. Financial statements People can gather past statements from their credit card company or bank. These records may be available online. People can also contact their bank to get paper copies of these statements. Property records To get documents related to property, homeowners can contact the title company, escrow company or bank that handled the purchase of their home or other property. Taxpayers who made home improvements can get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements. For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust. When no other records are available, people should check the county assessor's office for old records that might address the value of the property. Car owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries. These include Kelley's Blue Book, the National Automobile Dealers Association and Edmunds. More Information: Publication 547, Casualties, Disasters and Thefts Publication 584, Casualty, Disaster and Theft Loss Workbook Publication 584-B, Business Casualty, Disaster and Theft Loss Workbook Publication 976, Disaster Relief Small Business Administration DisasterAssistance.gov

Deadlines to register for an Economic Impact Payment are just around the corner Federal benefit recipients who don’t normally have a filing requirement but do have qualifying children must register by Wednesday, Sept. 30 to receive a $500 catch-up payment per child. Other non-filers have until Thursday, Oct. 15 to register for their Economic Impact Payment. Anyone using the Non-Filers tool can speed up the arrival of their payment by choosing to receive it by direct deposit. ...Those who don’t choose direct deposit will get a check. The deadline to claim a $500 payment for a qualifying child is Wednesday, Sept. 30, 2020. The deadline applies to individuals who didn't receive $500 per qualifying child earlier this year when they received their own automatic Economic Impact Payment and who receive: Social Security retirement Survivor or disability benefits Supplemental Security Income (SSI) Railroad Retirement benefits Veterans Affairs Compensation Veterans Affairs Compensation and Pension (C&P) benefits Federal benefit recipients can use the Non-Filers: Enter Payment Info Here tool to get a catch-up payment for a qualifying child if they have NOT done one of the following: already used the Non-Filers tool to provide information about their qualifying child or filed their 2019 or 2018 federal tax return Anyone who filed or plans to file a 2018 or 2019 tax return should NOT use this tool and should file their tax return by the Oct. 15, 2020 deadline. People who’ve already used the Non-Filers tool to provide info on children don’t need to do anything else. The IRS will automatically make a payment to them in October. Thursday, Oct. 15, 2020 is the registration deadline to get an Economic Impact Payment this year. Eligible individuals with little or no income who are not required to file a tax return may still qualify to receive an Economic Impact Payment this year, if they use the Non-Filers: Enter Payment Info Here tool by Oct. 15, 2020. Anyone who misses either of these deadlines will need to wait until next year and claim the payment as a credit on their 2020 federal income tax return. More Information Economic Impact Payment eligibility FAQs See more

The IRS Tax Tip, Tips for taxpayer who need to file a new W-4, offers a brief article for easy sharing with employees, clients and partners. The article explains how to use the IRS Tax Withholding Estimator. This tool offers workers, retirees and self-employed individuals a step-by-step method to help figure out if they should adjust their withholding.

Update on backlog of unopened checks ________________________________________ The IRS is processing a backlog of mail due to COVID-19, and paper checks mailed to the IRS, either with or without a tax return, may still be unopened. Taxpayers in this situation should not cancel their checks and should make sure funds remain available so the IRS can process them to avoid potential penalties and interest. The IRS credits payments using the postmarked date on mail rather than th...e date they opened and processed them so they will not be late if postmarked timely. The IRS will provide relief to taxpayers for bad check penalties for dishonored checks the agency received between March 1 and July 15, 2020, due to delays in IRS mail processing. See more