Taxtown Inc

CAN YOU CLAIM HOME OFFICE DEDUCTION? The home office deduction is available to qualifying self-employed taxpayers, independent contractors and those working in the gig economy. However, the Tax Cuts and Jobs Act suspended the business use of home deduction from 2018 through 2025 for employees. Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home. Qualifying for a deduction There are two basic requirements to qualify for the deduction. The taxpayer needs to use a portion of the home exclusively for conducting business on a regular basis and the home must be the taxpayer’s principal place of business. To claim the deduction, a taxpayer must use part of their home for one of the following: • Exclusively and regularly as a principal place of business for a trade or business • Exclusively and regularly as a place where patients, clients or customers are met in the normal course of a trade or business • As a separate structure that's not attached to a home that is used exclusively and regularly in connection with a trade or business • On a regular basis for storage of inventory or product samples used in a trade or business of selling products at retail or wholesale • For rental use • As a daycare facility The term "home" for purposes of this deduction: • Includes a house, apartment, condominium, mobile home, boat or similar property • Includes structures on the property, like an unattached garage, studio, barn or greenhouse • Doesn’t include any part of the taxpayer’s property used exclusively as a hotel, motel, inn or similar business Qualified expenses Deductible expenses for business use of home normally include the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance, and repairs. In general, a taxpayer may not deduct expenses for the parts of their home not used for business; for example, expenses for lawn care or painting a room not used for business. Claiming the deduction A taxpayer can use either the regular or simplified method to figure the home office deduction. Using the regular method, qualifying taxpayers compute the business use of home deduction by dividing expenses of operating the home between personal and business use. Self-employed taxpayers filing IRS Schedule C, Profit or Loss from Business (Sole Proprietorship) first figure this deduction on Form 8829, Expenses for Business Use of Your Home. Using the Simplified Option, qualifying taxpayers use a prescribed rate of $5 per square foot of the portion of the home used for business (up to a maximum of 300 square feet) to figure the business use of home deduction. A taxpayer claims the deduction directly on IRS Schedule C. Revenue Procedure 2013-13 (PDF) provides complete details of this safe harbor method. Daycare facilities Taxpayers who use their home on a regular basis for providing daycare may be able to claim a deduction for part of the home even if it is used as the same space for nonbusiness purposes. To qualify, both of the following requirements must be met: • The business must provide daycare for children, people age 65 or older, or people who are physically or mentally unable to care for themselves • The business must have applied for, been granted, or be exempt from having a license, certification, registration, or approval as a daycare center or as a family or group daycare home under state law.

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IRS.GOV Economic Impact Payments: Partner and Promotional Materials | Internal Revenue Service

IRS.GOV Coronavirus Tax Relief and Economic Impact Payments | Internal Revenue Service

There were bound to be glitches, this is a mass undertaking of a magnitude never before seen nor thought possible, I know its rough for many of our brothers and sisters, hang on people it will happen, keep your faith. WASHINGTONPOST.COM Glitches prevent $1,200 stimulus checks from reaching millions of Americans

The link to enter direct deposit info for "FILERS" (those that file tax returns but the IRS does not have that direct deposit info is up and running is up and running) but it may be slow IRS.GOV Get My Payment | Internal Revenue Service

Don't call me now...🤪 IRS.GOV October 15 deadline nears for taxpayers who requested tax filing extensions | Internal Revenue Service

WASHINGTON — The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2021 in Notice 2020-79, posted today on IRS.gov. Highlights of changes for 2021 The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver’s Credit all increased for 2021. Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his or her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his or her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply) Here are the phase-out ranges for 2021: • For single taxpayers covered by a workplace retirement plan, the phase-out range is $66,000 to $76,000, up from $65,000 to $75,000. • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $105,000 to $125,000, up from $104,000 to $124,000. • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $198,000 and $208,000, up from $196,000 and $206,000. • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $66,000 for married couples filing jointly, up from $65,000; $49,500 for heads of household, up from $48,750; and $33,000 for singles and married individuals filing separately, up from $32,500. • The income phase-out range for taxpayers making contributions to a Roth IRA is $125,000 to $140,000 for singles and heads of household, up from $124,000 to $139,000. For married couples filing jointly, the income phase-out range is $198,000 to $208,000, up from $196,000 to $206,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000 Key employee contribution limits remain unchanged The limit on contributions by employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $19,500. The catch-up contribution limit for employees aged 50 and over who participate in these plans remains unchanged at $6,500. The limitation regarding SIMPLE retirement accounts remains unchanged at $13,500. The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

IRS makes it easier to set up payment agreements; Offers other relief to taxpayers struggling with tax debts WASHINGTON – The Internal Revenue Service today announced a number of changes designed to help struggling taxpayers impacted by COVID-19 more easily settle their tax debts with the IRS. The IRS assessed its collection activities to see how it could apply relief for taxpayers who owe but are struggling financially because of the pandemic, expanding taxpayer options for making payments and alternatives to resolve balances owed. “The IRS understands that many taxpayers face challenges, and we’re working hard to help people facing issues paying their tax bills,” said IRS Commissioner Chuck Rettig. “Following up on our People First Initiative earlier this year, this next phase of our efforts will help with further taxpayer relief efforts.” “We want people to know our IRS employees are committed to continue helping taxpayers wherever possible, including offering many options for those struggling to pay their tax bills,” said Darren Guillot, the IRS Small Business/Self-Employed Deputy Commissioner for Collection and Operations Support. Guillot discussed the new relief options in a new edition of IRS “A Closer Look.” Taxpayers who owe always had options to seek help through payment plans and other tools from the IRS, but the new IRS Taxpayer Relief Initiative is expanding on those existing tools even more. The revised COVID-related collection procedures will be helpful to taxpayers, especially those who have a record of filing their returns and paying their taxes on time. Among the highlights of the Taxpayer Relief Initiative: • Taxpayers who qualify for a short-term payment plan option may now have up to 180 days to resolve their tax liabilities instead of 120 days. • The IRS is offering flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise. • The IRS will automatically add certain new tax balances to existing Installment Agreements, for individual and out of business taxpayers. This taxpayer-friendly approach will occur instead of defaulting the agreement, which can complicate matters for those trying to pay their taxes. • To reduce burden, certain qualified individual taxpayers who owe less than $250,000 may set up Installment Agreements without providing a financial statement or substantiation if their monthly payment proposal is sufficient. • Some individual taxpayers who only owe for the 2019 tax year and who owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS. • Additionally, qualified taxpayers with existing Direct Debit Installment Agreements may now be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.

IRS.GOV Identity Protection PIN Program will soon be available to taxpayers nationwide | Internal Revenue Service

Get Ready for Taxes: What’s new and what to consider when filing in 2021 WASHINGTON – The Internal Revenue Service today encouraged taxpayers to take necessary actions in the final weeks of the year to help file federal tax returns timely and accurately in 2021. This is the third 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 now to make tax filing easier in 2021. This year, there are some key items to consider involving credits, deductions and refunds: Recovery Rebate Credit/Economic Impact Payment. Taxpayers who received an Economic Impact Payment, should keep Notice 1444, Your Economic Impact Payment, with their 2020 tax records. They may be eligible to claim the Recovery Rebate Credit on their tax year 2020 federal income tax return if: • they didn’t receive an Economic Impact Payment, or • their Economic Impact Payment was less than $1,200 ($2,400 if married filing jointly for 2019 or 2018), plus $500 for each qualifying child they had in 2020. If a taxpayer didn’t receive the full amount of the Economic Impact Payment for which they were eligible, they may be able to claim the Recovery Rebate Credit when they file in 2021. Individuals do not need to complete information about the Recovery Rebate Credit on tax year 2020 Form 1040 or 1040-SR when filing in 2021, unless eligible to claim an additional credit amount. Interest on refunds taxable. Taxpayers who received a federal tax refund in 2020 may have been paid interest. Refund interest payments are taxable and must be reported on federal income tax returns. In January 2021, the IRS will send Form 1099-INT to anyone who received interest totaling $10 or more. Charitable deduction changes. New this year, taxpayers who don't itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For more information, read Publication 526, Charitable Contributions. Refunds. The IRS always cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and processing may take longer. For example, the IRS, along with its partners in the tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud. Just like last year, refunds for tax returns claiming the Earned Income Tax Credit or Additional Child Tax Credit, cannot be issued before mid-February. This applies to the entire refund, even the portion not associated with these credits. The IRS reminds taxpayers that the fastest and safest way to receive a refund is to combine direct deposit with electronic filing including the IRS FreeFile program. Taxpayers can track their refund using the Where’s My Refund? tool. For more information to plan ahead, see Publication 5348, Get Ready to File, and Publication 5349, Year-Round Tax Planning is for Everyone.

When people get ready to file their federal tax return there are new things to consider when it comes to which credits to claim and what deductions to take. These things can affect the size of any refund the taxpayer may receive. Here are some new key things people should consider when filing their 2020 tax return. 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: • They didn't receive an Economic Impact Payment in 2020. • They are single and their payment was less than $1,200. • They are married, filed jointly for 2018 or 2019 and their payment was less than $2,400. • They didn't receive $500 for each qualifying child. Refund interest payment People who received a federal tax refund in 2020 may have been paid interest. The IRS sent interest payments to individual taxpayers who timely filed their 2019 federal income tax returns and received refunds. Most interest payments were received separately from tax refunds. Interest payments are taxable and must be reported on 2020 federal income tax returns. In January 2021, the IRS will send a Form 1099-INT, Interest Income, to anyone who received interest of at least $10. New charitable deduction allowance New this year, taxpayers who don't itemize deductions can take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For more information, people should review Publication 526, Charitable Contributions. Other refund-related reminders • Taxpayers shouldn’t rely on receiving a refund by a certain date, especially when making major purchases or paying bills. Some tax returns may require additional review and processing may take longer. • Refunds for taxpayers claiming the earned income tax credit or additional child tax credit can’t be issued before mid-February. This applies to the entire refund, not just the portion associated with this credit. • The fastest and most secure way to receive a refund is to combine direct deposit with electronic filing, including the IRS Free File program. Taxpayers can track the status of their refund using the Where’s My Refund? tool. More information: Publication 5348, Get Ready to File Publication 5349, Year-Round Tax Planning is for Everyone

THE IRS has yet to activate the link for the new $600 stimulus payment, below is the link when it does become active. “Throughout this challenging year, the IRS has worked around the clock to provide Economic Impact Payments and critical taxpayer services to the American people,” said IRS Commissioner Chuck Rettig. “We are working swiftly to distribute this second round of payments as quickly as possible. This work continues throughout the holidays and into the new year as we prepare for the upcoming filing season. We urge everyone to visit IRS.gov in the coming days for the latest information on these payments and for important information and assistance with filing their 2021 taxes.” IRS.GOV Get My Payment | Internal Revenue Service

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. 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. Although tax seasons frequently begin in late January, there have been five instances since 2007 when filing seasons did not start for some taxpayers until February due to tax law changes made just before the start of tax time.

Millions of taxpayers will receive their second Economic Impact Payments by debit card The Treasury Department and the IRS are issuing millions of second Economic Impact Payments by prepaid debit card to speed delivery of the payments to as many people as possible. If the Get My Payment tool on IRS.gov shows a date that a recipient’s payment was mailed, they should watch their mail for either a paper check or debit card. The debit cards arrive in a white envelope that prominently displays the U.S. Department of the Treasury seal. The prepaid debit card, called the Economic Impact Payment card, is issued by Treasury's financial agent, MetaBank®, N.A. The IRS does not determine who receives a card. The form of payment for the second mailed EIP may be different than the first mailed EIP. Some people who received a paper check last time might receive a prepaid debit card this time, and some people who received a prepaid debit card last time may receive a paper check. EIP Cards are safe, convenient and secure These cards provide certain protections against fraud, loss and other errors. They can be used to make purchases online or in stores anywhere Visa® Debit Cards are accepted. Cardholders can also use the cards to do any of the following without paying a fee: • Transfer funds to a personal bank account • Make signature or PIN-debit purchases anywhere Visa Debit • Cards are accepted — in stores, online or over the phone • Get cash back with a PIN debit purchase where available • Get cash from in-network ATMs • Get a replacement EIP Card, if needed • Check their card balance online, through a mobile app or by phone People should watch their mail carefully EIP Cards are being sent in a white envelope that prominently displays the U.S. Department of the Treasury seal. The envelope also states “Not a bill or an advertisement. Important information about your Economic Impact Payment.” The EIP Card has the Visa name on the front of the card and the issuing bank name, MetaBank®, N.A on the back. Each mailing will include instructions on how to securely activate and use the EIP Card. These cards are being issued to eligible recipients across all 50 states and the District of Columbia. Residents of the western United States are generally more likely to receive an EIP Card. People can check the status of their payment using the Get My Payment tool on IRS.gov. More information EIP debit cards Economic Impact Payments

All taxpayers now eligible for Identity Protection PINs IRS YouTube Video: WASHINGTON – The Internal Revenue Service today expanded the Identity Protection PIN Opt-In Program to all taxpayers who can verify their identities. The Identity Protection PIN (IP PIN) is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayers’ personally identifiable information. “This is a way to, in essence, lock your tax account, and the IP PIN serves as the key to opening that account,” said IRS Commissioner Chuck Rettig. “Electronic returns that do not contain the correct IP PIN will be rejected, and paper returns will go through additional scrutiny for fraud.” The IRS launched the IP PIN program nearly a decade ago to protect confirmed identity theft victims from ongoing tax-related fraud. In recent years, the IRS expanded the program to specific states where taxpayers could voluntarily opt into the IP PIN program. Now, the voluntary program is going nationwide. About the IP PIN Opt-In Program Here are a few key things to know about the IP PIN Opt-In program: • This is a voluntary program. • You must pass a rigorous identity verification process. • Spouses and dependents are eligible for an IP PIN if they can verify their identities. • An IP PIN is valid for a calendar year. • You must obtain a new IP PIN each filing season. • The online IP PIN tool is offline between November and mid-January each year. • Correct IP PINs must be entered on electronic and paper tax returns to avoid rejections and delays. • Never share your IP PIN with anyone but your trusted tax provider. The IRS will never call, text or email requesting your IP PIN. Beware of scams to steal your IP PIN. • There currently is no opt-out option but the IRS is working on one for 2022. How to get an IP PIN Taxpayers who want an IP PIN for 2021 should go to IRS.gov/IPPIN and use the Get an IP PIN tool. This online process will require taxpayers to verify their identities using the Secure Access authentication process if they do not already have an IRS account. See IRS.gov/SecureAccess for what information you need to be successful. There is no need to file a Form 14039, an Identity Theft Affidavit, to opt into the program Once taxpayers have authenticated their identities, their 2021 IP PIN immediately will be revealed to them. Once in the program, this PIN must be used when prompted by electronic tax returns or entered by hand near the signature line on paper tax returns. All taxpayers are encouraged to first use the online IP PIN tool to obtain their IP PIN. Taxpayers who cannot verify their identities online do have options. Taxpayers whose adjusted gross income is $72,000 or less may complete Form 15227, Application for an Identity Protection Personal Identification Number, and mail or fax to the IRS. An IRS customer service representative will contact the taxpayer and verify their identities by phone. Taxpayers should have their prior year tax return at hand for the verification process. Taxpayers who verify their identities through this process will have an IP PIN mailed to them the following tax year. This is for security reasons. Once in the program, the IP PIN will be mailed to these taxpayers each year. Taxpayers who cannot verify their identities online or by phone and who are ineligible for file Form 15227 can contact the IRS and make an appointment at a Taxpayer Assistance Center to verify their identities in person. Taxpayers should bring two forms of identification, including one government-issued picture identification. Taxpayers who verify their identities through the in-person process will have an IP PIN mailed to them within three weeks. Once in the program, the IP PIN will be mailed to these taxpayers each year. No change for confirmed identity theft victims Taxpayers who are confirmed identity theft victims or who have filed an identity theft affidavit because of suspected stolen identity refund fraud will automatically receive an IP PIN via mail once their cases are resolved Current tax-related identity theft victims who have been receiving IP PINs via mail will experience no change. See IRS.gov/IPPIN for additional details. IRS.GOV Get An Identity Protection PIN | Internal Revenue Service

2021 Tax Filing Season Information and Resources In this edition, find information about the upcoming 2021 Tax Filing Season including updates to important forms in multiple languages, the Earned Income Tax Credit (EITC), IRS Free File, taxability of unemployment compensation and the Recovery Rebate Credit. We'll begin accepting and processing 2020 tax year returns on Friday, February 12, 2021. As taxpayers and partners get ready to file their 2020 tax returns, they can find answers to their tax questions from the safety of their home using our online tools and resources. In preparation for the filing season, we updated the format of Publication 17 to make it easier to navigate and faster to download than previous editions. Plus, the 2020 edition is now accessible on most personal electronic devices. We also rolled out a new online option to "Submit Forms 2848 and 8821 Online" that will help tax professionals remotely obtain signatures from individual and business clients and submit authorization forms electronically.

COVID Tax Tip 2021-16 The first step of tax preparation is gathering records As taxpayers get ready to file their 2020 tax return, they should start by gathering their records. Taxpayers should gather all year-end income documents to help ensure they file a complete and accurate 2020 tax return and avoid refund delays. Taxpayers should have all necessary records handy, such as W-2s, 1099s, receipts, canceled checks and other documents that support any income, deductions or credits on their tax return. Most taxpayers should have already received income documents including: • Forms W-2, Wage and Tax Statement • Form 1099-MISC, Miscellaneous Income • Form 1099-INT, Interest Income • Form 1099-NEC, Nonemployee Compensation • Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund • Form 1095-A, Health Insurance Marketplace Statements Here are a couple other things taxpayers can do to prepare to file. View IRS account online Taxpayers can view their online account. This allows them to see the latest information about their federal tax account and most recently filed tax return through a secure and convenient tool on IRS.gov. This can help taxpayers if they need information from last year's return. People with an account on IRS.gov can also see the amounts of their Economic Impact Payments. This will be helpful to eligible individuals who either did not receive any Economic Impact Payments or received less than the full payments. They may claim the recovery rebate credit on their 2020 federal tax return. People should visit Secure Access: How to Register for Certain Online Self-Help Tools for more information about how to create an account or how to reset the username or password.

IRS.GOV Here are reasons taxpayers should file a 2020 federal tax return – and why e-file is best | Internal Revenue Service

IF WE HAVE ALREADY FILED YOUR TAX RETURN AND IT INCLUDED UNEMPLOYMENT BENEFITS WE WILL BE PREPARING AMENDED TAX RETURNS FOR YOU ONCE THE IRS UPDATES THEIR SYSTEMS AND PROVIDES GUIDANCE. IF WE HAVE YET TO FILE YOUR TAXES AND UNEMPLOYMENT WAS RECEIVED WE WILL FINALIZE THOSE RETURNS ONCE THE IRS UPDATES THEIR SYSTEMS AND PROVIDES GUIDANCE. *********IRS Statement - American Rescue Plan Act of 2021 March 12, 2021 The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov. The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time. The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance.

TAX SEASON DELAYS IRS Statement - American Rescue Plan Act of 2021 The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021. Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov. The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time. The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance. IRS.GOV Internal Revenue Service | An official website of the United States government