The 2021 1040 tax return includes a question regarding virtual currency transactions during the calendar year. This question must be answered either yes or no. If the return is filed leaving the box blank, the return will be rejected and a new one must be filed.
BHT&D Certified Public Accountants Blog
In an effort to capture unreported income flowing through third-party settlement organizations (TPSOs) such as Amazon, PayPal/Venmo, card payment processors and other marketplaces, the IRS requires these organizations to report payments made to sellers through their platforms on Form 1099-K.
Early in 2021, Congress passed the American Rescue Plan, which included a provision that increased the child tax credit amount and upped the age limit of eligible children. Historically, the credit was $2,000 per eligible child under age 17. For the 2021 tax year the American Rescue Plan increased the credit to $3,000 for each child under age 18 and to $3,600 for children under age 6 at the end of the year.
The American Rescue Plan Act (ARPA) expanded the Child Tax Credit for tax year 2021 only, allowing families to receive advance payments instead of taking the full credit on their 2021 tax return. The goal of increasing the credit, along with monthly payments, is to help families that have struggled during the COVID-19 pandemic and lessen child poverty in the U.S.
Beginning July 15, the IRS will start issuing monthly advance payments to families based on their 2020 or 2019 tax return.
Section 139 of the Internal Revenue Code excludes from a taxpayer’s gross income certain payment to individuals to reimburse or pay for expenses related to a “qualified disaster”. Covid-19 is a federally declared disaster.
A taxpayer’s filing status for the year is based upon his or her marital status at the close of the tax year. Thus, if you get married on the last day of the tax year, you are treated as married for the entire year. The options for married couples are to file jointly or separately. Both statuses can result in surprises – some pleasant and some unpleasant – for individuals who previously filed as unmarried.
If you are inclined to procrastinate until the end of the year or, even worse, until tax-filing season to worry about your taxes, you may be missing out on opportunities to reduce your tax and avoid certain penalties.
The following are some events that can affect your tax return; you may need to take steps to mitigate their impact and avoid unpleasant surprises after it is too late to address them.
Tax reform has changed the way most taxpayers need to think about and plan for their taxes. It is no longer business as usual. Advanced planning will become very important long before tax time next year.
For most taxpayers, the most significant change is the increase in their standard deduction, which on the surface seems like a big benefit. But, don’t overlook the fact that the same tax reform that nearly doubled the standard deduction took away the personal exemption as a deduction.
Good tax planning and working with an accountant specializing in your field are key factors for agribusinesses in managing their tax liability. As we head into the end of the year, here are five things to keep in mind to be prepared for next tax season:
1. Tax Planning – Determining your year-to-date income PRIOR to the end of the year and planning for an appropriate income level is
The time spent getting organized for your tax appointment is priceless. It gives you confidence that your returns will be filed timely, accurately, and that all qualified deductions are accounted for.
Partnering with an experienced Certified Public Accountant can bring you piece of mind and possibly tax savings. Here are some tips for making the best of that partnership: