The Beat Goes On
/As time keeps marching forward and the coronavirus continues to affect families, local communities, global economies, and tax legislation, our firm remains committed to serving client tax needs. As part of this commitment, we want to make you aware of a few recent hot topics crossing our desks as questions.
Like the first round of economic impact payments received mid-2020, the year-end legislation provides a new economic impact payment in the amount of $600 per eligible family member. The payment is reduced based on income thresholds. It may take months for all qualifying taxpayers to receive their payments. Some may need to file their 2020 tax return to claim it. A summary of payments and status of payments may be accessed at the IRS.gov website, under “Get My Economic Impact Payment.” Information on both the 2020 and 2021 payments received is needed to prepare your 2020 federal tax return.
New this year is a $300 charitable deduction (cash donations only) for taxpayers (single or joint filers) who do not itemize.
The maximum amount for the 2021 tax year was increased to $600 for married couples filing jointly.
Recently, the IRS expanded the Identity Protection PIN (IP PIN) Program to all taxpayers who can verify their identities. The IP PIN is a six-digit code known only to the taxpayer and the IRS. Once obtained, it is required to file your tax return. The PIN helps prevent identity thieves from filing fraudulent tax returns using a taxpayers’ personal information. Formerly, a PIN was only issued to those with confirmed identity theft on tax-related fraud. This is currently a voluntary program. We recommend it is fully understood before you elect to opt in.
There have been numerous other key tax provisions over the past twelve months—too many to write about in a limited newsletter. However, we are here to help you navigate new tax laws through our Tax Questionnaire, emails, and phone calls. Please add notes to your tax documents to assist us in knowing what changes you experienced during this challenging year. It is more important than ever to stay connected.
- Pam Smitson, CPA, CGMA, Smitson Erhart-Graves Financial Advisors
