News

For tax years beginning on or after January 1, 2022, S-Corporations and Partnerships may annually make an irrevocable election to pay income tax at the entity level  (HB 149).    Georgia Dept. of Revenue has posted FAQs on its website.

https://dor.georgia.gov/hb-149-pass-through-entity-tax-faq

Congress is considering bills that may ease limits on disaster loss reductions.

https://www.wsj.com/articles/are-your-2021-disaster-losses-tax-deductible-congress-will-decide-11634290207?st=bj3yk4exfbnlhlm&reflink=article_email_share

The IRS plans to start sending out the new advance child tax credit payments to eligible taxpayers on July 15th.  Letters are being sent to taxpayers who appear to be eligible for the advance credit payments.

https://www.irs.gov/newsroom/irs-sending-letters-to-more-than-36-million-families-who-may-qualify-for-monthly-child-tax-credits-payments-start-july-15

The taxpayer advocate posted a blog last Thursday announcing the IRS has a return processing backlog of more than 29-million tax returns at this point.

Causes include inability to reprogram IRS computers for late tax law changes Congress passed in December and March, as well as resource overload from additional activities loaded onto the IRS by Congress.

https://www.taxpayeradvocate.irs.gov/news/nta-blog-2021-filing-season-bumps-in-the-road-part-1/

IRS officials are telling tax professional organizations that taxpayers should not file amended 2020 tax returns at this time to claim the new $10,200 tax exclusion for 2020 payments of unemployment compensation.

IRS Commission Charles Rettig told a Congressional committee on Thursday, March 18th that he expects the IRS will be able to identify the alread-filed 2020 returns that contain unemployment income and send taxpayers refunds based on the new 2020 exclusion.

The IRS has finally responded to pleas from members of Congress and tax professional organizations and extended the regular tax filing deadline for 2020 individual income tax returns to May 17, 2021.

The extension will cover both the filing of an individual 2020 tax return and any 2020 tax due.

https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-and-payment-deadline

The extension does not apply to other tax returns or payments normally due on April 15th - for example the first quarter 2021 estimated tax payments are still due on April 15th.

The IRS has announced that further guidance will be provided regarding all the tax deadlines and procedures impacted by the filing extension.

Chet Burgess, EA, NTPI Fellow

The IRS has almost 7 million 2020 tax returns with refunds due in a queue for manual processing, which will take several weeks.  So the taxpayers are having to wait for their money.

Details in this article from The Washington Post: 

https://apple.news/AgeMMDkIjTvi_NiBlpcE1hQ

Taxpayers who has significantly lower income in 2020 than in 2019 may want to file their 2020 tax returns as soon as possible if the 2020 return could result in a larger stimulus payment this year.

USA Today has a good overview of the issues:

https://www.usatoday.com/story/money/taxes/2021/02/23/tax-return-stimulus-check-file-early-dependents/4552270001/

IRS tips on how to avoid unscrupulous "ghost" tax preparers:

https://www.irs.gov/newsroom/beware-of-ghost-preparers-who-dont-sign-tax-returns

The IRS is strongly recommending that taxpayers file their 2020 returns electronically and request direct deposit of refunds for the quickest turnaround.  The IRS is still backlogged with millions of 2019 paper tax returns.

https://apple.news/AV_X5D9qjTl-zHsQk6nSgYA