Included in the 2021 Appropriations legislation that was signed into law on December 28 were the following tax law provisions that will affect 2020 federal individual returns:

Earned Income Tax Credit and Child Tax Credit Change

Individuals whose 2020 earned income is less than their 2019 earned income have the option of using the 2019 amount to calculate their 2020 Earned Income Tax Credit and/or their Child Tax Credit.

Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals

When calculating one or both of these credits on new Form 7202 the taxpayer may elect to use either their 2019 or 2020 net earnings from self-employment.

Disaster Relief Provisions

The following disaster relief provisions were made available to taxpayers that were affected by a federally declared disaster that occurred in 2020:

Deduction for Personal Casualty Losses
Uncompensated losses that occurred in a federally declared disaster area:

• Must exceed $500 in order to take a deduction

• Removes the requirement that the loss exceed 10% of AGI

• May be taken as an itemized deduction or as an increase in a taxpayer’s standard deduction.

Retirement Fund Provisions

• For qualified federal disaster distributions, an individual can withdrawal funds (up to $100,000) from a retirement account free of the 10 percent early withdrawal penalty and can spread the taxable portion on that distribution over a three year period.

• Any qualified federal disaster relief withdrawal will not be taxable if it is recontributed within three years of the date of distribution.

• Increases the maximum loan amount for qualified federal disaster relief to $100,000.

• Allows for re-contribution of retirement plan withdrawals for cancelled home purchases or construction of a principal residence due to a federally declared disaster.

Charitable Contributions for Disaster Relief Suspends the limitation on charitable contributions associated with a federally declared disaster that are made in 2020.

Recovery Rebate Credit – 2nd Economic Impact (Stimulus) Payments

As was the case with the 1st economic impact payment (EIP1) that was sent to individuals earlier in 2020, the 2nd economic impact payment (EIP2) is also being treated as an advance payment of the Recovery Rebate credit.

For the vast majority of taxpayers this credit will be calculated as zero since they already received their full EIP1 payment during 2020 and their full EIP2 payment in January of 2021.
This credit appears on line 30 of the 2020 Form 1040/1040SR and the credit is calculated based on a worksheet included in the 2020 1040 instructions on page 59. The credit will be calculated based on income, filing status and the number of qualifying children reported on the 2020 federal return.

The total available recovery rebate credit is:

• EIP1 - $1,200 ($2,400 for MFJ) plus $500 for each eligible dependent child under 17

  Plus

• EIP2 - $600 ($1,200 for MFJ) plus $600 for each eligible dependent child under 17

Taxpayers with the following circumstances will be eligible for this credit on their 2020 federal return:

• Taxpayers who did not receive an EIP1 ($2,400 – MFJ or $1,200 for all other filing status’

• Taxpayers who did not receive an EIP2 ($1,200 – MFJ or $600 for all other filing status’

• Taxpayer did not receive a $500 (EIP1) and/or $600 (EIP2) payment for all of their eligible children

• The taxpayer’s economic stimulus payment was limited based on their income on their 2018 or 2019 return and their 2020 income is below the income phase out or income limit for the credit.

Included in the 2021 Appropriations legislation that was signed into law on December 28 were the following tax law provisions that will affect 2020 federal individual returns:

Earned Income Tax Credit and Child Tax Credit Change

Individuals whose 2020 earned income is less than their 2019 earned income have the option of using the 2019 amount to calculate their 2020 Earned Income Tax Credit and/or their Child Tax Credit.

Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals

When calculating one or both of these credits on new Form 7202 the taxpayer may elect to use either their 2019 or 2020 net earnings from self-employment.

Disaster Relief Provisions

The following disaster relief provisions were made available to taxpayers that were affected by a federally declared disaster that occurred in 2020:

Deduction for Personal Casualty Losses
Uncompensated losses that occurred in a federally declared disaster area:

• Must exceed $500 in order to take a deduction

• Removes the requirement that the loss exceed 10% of AGI

• May be taken as an itemized deduction or as an increase in a taxpayer’s standard deduction.

Retirement Fund Provisions

• For qualified federal disaster distributions, an individual can withdrawal funds (up to $100,000) from a retirement account free of the 10 percent early withdrawal penalty and can spread the taxable portion on that distribution over a three year period.

• Any qualified federal disaster relief withdrawal will not be taxable if it is recontributed within three years of the date of distribution.

• Increases the maximum loan amount for qualified federal disaster relief to $100,000.

• Allows for re-contribution of retirement plan withdrawals for cancelled home purchases or construction of a principal residence due to a federally declared disaster.

Charitable Contributions for Disaster Relief Suspends the limitation on charitable contributions associated with a federally declared disaster that are made in 2020.

Recovery Rebate Credit – 2nd Economic Impact (Stimulus) Payments

As was the case with the 1st economic impact payment (EIP1) that was sent to individuals earlier in 2020, the 2nd economic impact payment (EIP2) is also being treated as an advance payment of the Recovery Rebate credit.

For the vast majority of taxpayers this credit will be calculated as zero since they already received their full EIP1 payment during 2020 and their full EIP2 payment in January of 2021.
This credit appears on line 30 of the 2020 Form 1040/1040SR and the credit is calculated based on a worksheet included in the 2020 1040 instructions on page 59. The credit will be calculated based on income, filing status and the number of qualifying children reported on the 2020 federal return.

The total available recovery rebate credit is:

• EIP1 - $1,200 ($2,400 for MFJ) plus $500 for each eligible dependent child under 17

  Plus

• EIP2 - $600 ($1,200 for MFJ) plus $600 for each eligible dependent child under 17

Taxpayers with the following circumstances will be eligible for this credit on their 2020 federal return:

• Taxpayers who did not receive an EIP1 ($2,400 – MFJ or $1,200 for all other filing status’

• Taxpayers who did not receive an EIP2 ($1,200 – MFJ or $600 for all other filing status’

• Taxpayer did not receive a $500 (EIP1) and/or $600 (EIP2) payment for all of their eligible children

• The taxpayer’s economic stimulus payment was limited based on their income on their 2018 or 2019 return and their 2020 income is below the income phase out or income limit for the credit.

Every tax professional in the United States -- whether a member of a major accounting firm or an owner of a one-person storefront -- is a potential target for highly sophisticated, well-funded and technologically adept cybercriminals around the world.

Their objective: to steal your clients’ data so they can file fraudulent tax returns that better impersonate their victims and are harder to detect. Their tactics: using email, the phone or other means to trick you into giving up computer passwords, e-Services passwords, to steal your EFINs or CAF numbers or even to take remote control of your entire computer system.

Protecting client data also is the law. Federal Trade Commission regulations require professional tax preparers to create and enact security plans to protect client data. Review IRS Publication 4557, Safeguarding Taxpayer Data PDF, for details and security recommendations. Also, see IRS Publication 5293, Data Theft Resource Guide for Tax Professionals PDF, for a roundup of IRS.gov information.

No one can fight this crime alone. It takes all of us, working together. That is why the Security Summit - the unprecedented partnership between the IRS, state tax agencies, and the private-sector tax industry - came together to form a united and coordinated front against this common enemy. And, that’s why the Summit partners – through the “Protect Your Clients, Protect Yourself” awareness campaign - are asking tax professionals nationwide to join this effort.

Due to COVID 19, Our office has been virtual and sometimes local. By law, our office is running standard business hours. So, if needing tax preparation services, please make appointment and we will conducted a video interview. Thanks and stay safe.

Symptoms

Signs and symptoms of COVID-19 may appear two to 14 days after exposure and can include:

• Fever

• Cough

• Shortness of breath or difficulty breathing

Other symptoms can include:

• Tiredness

• Aches

• Runny nose

• Sore throat

The severity of COVID-19 symptoms can range from very mild to severe. Some people have no symptoms. People who are older or have existing chronic medical conditions, such as heart or lung disease or diabetes, may be at higher risk of serious illness. This is similar to what is seen with other respiratory illnesses, such as influenza.

The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $56,000 or less, persons with disabilities and limited English-speaking taxpayers who need assistance in preparing their own tax returns. In addition to VITA, the Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors.

Many taxpayers that qualify for free tax return preparation may also qualify for the Earned Income Tax Credit.  Taxpayers earning $55,952 or less can see if they qualify using the EITC Assistant tool at IRS.gov/eitc available in English and Spanish,. The tool helps users determine if they are eligible and if they have a qualifying child or children, and it estimates the amount of the EITC they may get.

See the Free Tax Return Preparation for Qualifying Taxpayers page for more information.

See IR-2020-20.

The IRS is now accepting and processing federal tax returns for tax year 2019. The deadline to file a 2019 tax return and pay any tax owed is Wednesday, April 15, 2020.

The IRS strongly encourages people to file their tax returns electronically and choose direct deposit for faster refunds. Filing electronically reduces tax return errors as the tax software does the calculations, flags common errors and prompts taxpayers for missing information.

See IR-2020-20.

$500-$6,000 Advance Loans Starting January 2nd

Taxpayers may get 25% of refund amount for no cost - for loans up to $2.000*

Advance issued by cashier's check or Walmart MoneyCard 3

* Loans of 50% or 75% of expected tax refund have an APR of 36%.

Fast Approvals- Clients are notified the moment they are approved

High Approval Rates