Tax Update & Itemizer

My staff and I hope you've had an enjoyable Christmas, Hanukkah or Kwanza and a Happy New Year!! We look forward to working with you again as the Covid environment continues and government subsidies persist in our tax preparation.

With Covid-19, the Delta and Omicron variants persisting, the list of precautions everyone is taking grows. We are concerned with your ability to stay safe and healthy. With that said, we are flexible to receive your tax information by meeting in person with masks and or distancing. for a quick drop off at the counter, utilize our drop box outside our front door, mail, email, fax or schedule a phone call or virtual meeting as you see fit. We will accommodate your needs in whatever manner you are comfortable with. We sanitize after any client meeting at the office and have sanitizer available at the front desk for anyone to use. We want you to feel safe during this most unusual time.

 I would encourage you to visit and utilize my websites for information, communication, and education of all things tax and financial. www.iaccpapfs.com is my Tax site and my Financial Planning site is www.lifestaqesadvisory.com. In April of 2020 I started My Podcast, WTF­ - Wealth, Taxes and Finance! Give it a listen, every Tuesday at noon we release a new episode. As of this writing, there are 100+ episodes filled with various topics on taxes, finances, investments, estate, and retirement planning issues. We have thousands of listeners and currently are in over 25 countries!

 The IRS has mandated some very stringent and essential changes for taxpayers going forward. The IRS has shihed much of their compliance burden to "me" as a tax preparer to assist the agency due to cutbacks with services and communication to 'you' the taxpayer, forcing us to assure you comply with these regulations. You as a taxpayer need to supply us with your personal tax information and verify with documentation, questionnaires or statements, income, and expenses to be declared for this tax season, for your taxes to be accepted by the IRS.

 The following list is just a few of the things we have dealt with this past year and will continue to do so again this tax season:

1. IRS 2020 processing backlog will extend well into the 2022 tax season and 2021 is coming
   
2. IRS 2020 processing backlog will extend well into the 2022 tax season and 2021 is coming2) IRS still had not reviewed over 5 million returns from 2019 and they were behind on over 15 million 2020 returns
   
3. 85 million calls made to IRS last year ...... only 39% reached an agent
   
4. 42% of all IRS copiers and printers were outdated, unused or broken4) 42% of all IRS copiers and printers were outdated, unused or broken
   
5. Form 6419 will show how much advanced Child Tax Credit you received5) Form 6419 will show how much advanced Child Tax Credit you received
   
6. Child Tax Credit, Earned Income Credit, Education Credit and Stimulus payment #3 will all need to be tracked, reported, and reconciled by ushild Tax Credit, Earned Income Credit, Education Credit and Stimulus payment #3 will all need to be tracked, reported, and reconciled by us
   1. Form 1444-C will report your 3rd EIP Stimulus payment
   2. Form 6419 reports your Advanced Child Tax Credit payments

(People who have received the advance CTC payments can also check the amount of their payments by using this link - www.irs.gov/credits-deductions/child-tax-credit-update-portal)

1. Several more tax changes have taken effect during 2021 - the CARES Act, SECURES act, and Corona Virus and Child Tax Credit increases
2. While the 3rd stimulus payment is not taxable, it will be reportable from Notice 1444-C so make sure you bring this with your other paperwork.
3. The $600/week unemployment benefit will be reportable and taxable
4. Any PPP or EIDL loans or grants will need to be reconciled, reported, and possibly paid back depending on the use and timing of the funds.
5. The IRS and the State of Ohio now both require us to obtain your Driver's License info. Any household member of driving age is required to present an ID for use in preparing and filing your Federal and Ohio tax returns as it is now part of the taxpayer verification process. 
6. Form 8867 normally used for EIC or Earned Income Credit purposes, has now been expanded to include the Child Tax Credit ($3600/$3000) for resident children under 6 and under 17 living at your address. 8867 is also used for the American Opportunity Tax Credit for education tuition (up to $2500). Finally, the Head of Household filing status is now also part of the verification needed to utilize the favored tax bracket.
   1. A Child Tax Credit Worksheet is provided in this packet for you to document Advanced Payments received during 2021 for each child. Complete and include with your tax paperwork for 2021.
7. To be assured you receive proper credit one of the following documents must be provided to us:
   1. Residency of child needs verified - Living at addressa. Residency of child needs verified - Living at addressSchool Records
      
      1. Health Card statement
         
      2. Medical Records
         
      3. Child Care provider records
         
   2. Disability verificationPhysician statement
      
      1. Healthcare provder statement 
         
      2. Social Security or program statement
         
   3. Self-Employment verificationBusiness license
      
      1. 1099s filed
         
      2. Income and Expense Records
         
      3. Bank statements
         
8. Refunds can normally take up to 21 days to receive as a direct deposit that is filed electronically. No refunds are issued prior to February 15th and physical checks take longer to receive. Missing data will result in delayed processing of tax returns and therefore, delayed receipt of refunds.
   
9. 1099s for Brokerage accounts have until February 15 to be filed, corrected 1099s should be filed by February 28
   
   1. Again, if you have college age children that work. and we do not prepare their returns. we will need a copy of each return. We need to coordinate their returns with yours in order to minimize taxes and assure that proper reporting, tax credits and tax reduction is being achieved as a family unit.

By dropping off, mailing, faxing, or emailing your 2021 tax information to us it is inferred that you are engaging us to prepare your Federal, State and Local returns for 2021. You also agree to the following conditions:

1. We will prepare your 2021 federal, state, and local income tax returns. We will depend on you to provide the information we need to prepare complete and accurate returns. We may ask you to clarify some items but will not audit or otherwise verify the data you submit. An Organizer is attached to aid in your collection of the data required for your return. The Organizer will help you avoid overlooking important information. By using it, you will contribute to efficient preparation of your returns and help minimize the cost of our services.
   
2. Our fee will be based on the time required at standard billing rates plus out-of-pocket expenses. With new reconciliation and verification for the tax changes, along with the filing of advanced Child Tax Credits for children under 6 and under 17, additional fees may be incurred. Our preparation fees are due and payable upon completion. We will return your original records to you at the end of this engagement.
3. Our engagement is limited to preparing your 2021 tax returns and will conclude with the delivery of the completed returns to you by email unless otherwise requested, your signature on the 8879 and our subsequent submittal of your tax return by e-filing. Remember. NO returns will be e-filed until we have a signed 8879 and payment has been received or arranged. {If you need to paper file, our engagement concludes upon the delivery of your electronic or paper returns to you).3) Our engagement is limited to preparing your 2021 tax returns and will conclude with the delivery of the completed returns to you by email unless otherwise requested, your signature on the 8879 and our subsequent submittal of your tax return by e-filing. Remember. NO returns will be e-filed until we have a signed 8879 and payment has been received or arranged. {If you need to paper file, our engagement concludes upon the delivery of your electronic or paper returns to you).
4. Any correspondence from the IRS pertaining to the 2021 taxes that you bring into us for a response on your behalf, clarification or resolution will be deemed a separate engagement requiring a retainer and will be billed at our normal billing rate for such services. Anything that is due to our error will be handled without cost to full resolution and we will pay any penalties and interest on cases deemed reasonable and customary.

The IRS lack of personnel resources, Ohio compliance issues and complexity of local/city taxes over the past several years has increasingly added a huge drain on our time. With all the new compliance mandated by the IRS for me as a preparer, we ask that you be patient. Please understand that additional time may be required to verify proper tax credits, dependency claims and stimulus benefits.

As always, if we erred in some manner, we will bear the cost for reasonable interest and penalties if so levied upon you.

I encourage you to bring in your tax information as soon as you have it ready. This filing year may have additional extensions as did this past filing year. In relation to filing deadlines, they may be moved from April 15 since Covid is still a major concern and disruption. As usual, if tax information is received after March 31, you may go on extension. If you do, we will have your returns completed as soon as we can. Please complete the itemizer as much as possible. Make sure that you have given us a current phone number and email so we can update our records for contacting you. 

Remember, we have a drop box at the front door for after-hours drop offs. Office hours for the tax season will be as follows: Monday- Thursday 9am-4pm, Friday 9am-3pm and Saturday 9am-12pm or by appointment, closed Sunday. If you need to meet outside of those hours, please contact the office for an appointment.