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Archive for February, 2021

New Key Items on 2020 Tax Returns

Wednesday, February 10th, 2021

There are new key things to consider when filing your 2020 tax return. These items may affect the amount of your refunds or amounts you owe so you want to make sure to pay close attention to them:

• Recovery Rebate Credit – Taxpayers may be able to claim the recovery rebate credit if they met the eligibility requirements in 2020 and one of the following applies to them:
1) They didn’t receive an Economic Impact Payment in 2020.
2) They are single and their payment was less than $1,200.
3) They are married, filed jointly for 2018 or 2019 and their payment was less than $2,400.
4) They didn’t receive $500 for each qualifying child.

• Refund Interest Payment – Some people who received refunds for their 2019 tax returns may have been paid interest by the IRS. These interest payments would have been received separately from your refund, they were not paid together in one lump sum. These interest payments are taxable and must be reported on your 2020 tax return. In January 2021 the IRS will send out Form 1099-INT to anyone who received an interest payment of $10 or more.

• New Charity Deduction Allowance – New for 2020 is that most taxpayers who do not itemize can deduct up to $300 of cash charity contributions made to qualified organizations.

Please consult your tax advisor on all the above information.

What Rights you have when Dealing with the IRS

Tuesday, February 2nd, 2021

Everyone dreads getting that “Audit” notice in the mail from the IRS but once you do, rest assured that you do not have to fight the IRS alone. You are entitled to representation when dealing with the IRS. You have a choice of which authorized representative you would like to represent you. Some examples of the people you could have work with you are an attorney, CPA, enrolled actuary or any other person that is permitted to represent a taxpayer before the IRS (the person you choose would need to submit a written power of attorney form to the IRS to be able to represent you).

If you retain representation you do not have to attend with your rep unless the IRS formally summons you to appear. Your rep can basically act as a middle person between yourself and the IRS. But if you do choose to meet with the IRS yourself, in most situations the IRS must suspend an interview if you request to consult with a representative.

If you cannot afford representation you have the right to seek assistance from a Low Income Taxpayer Clinic, which represents taxpayers whose income is below a certain level and who need to resolve tax problems with the IRS. You can visit the following page for more information or by calling 800-829-3676:

https://taxpayeradvocate.irs.gov/about/litc

Please consult your tax advisor on all the above issues.