Gateway Tax Service

12/01/2021

What taxpayers can do now to get ready to file taxes in 2022
There are steps people, including those who received stimulus payments or advance child tax credit payments, can take now to make sure their tax filing experience goes smoothly in 2022. Here are some other things they should do to prepare to file their tax return.
Gather and organize tax records
Organized tax records make preparing a complete and accurate tax return easier. They help avoid errors that lead to processing delays that slow refunds. Having all needed documents on hand before taxpayers prepare their return helps them file it completely and accurately. This includes:
• Forms W-2 from employers
• Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan
• Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy
• Form 1099-INT for interest received
• Other income documents and records of virtual currency transactions
Taxpayers should also gather any documents from these types of earnings. People should keep copies of tax returns and all supporting documents for at least three years.
Income documents can help taxpayers determine if they're eligible for deductions or credits. People who need to reconcile their advance payments of the child tax credit and premium tax credit will need their related 2021 information. Those who did not receive their full third Economic Impact Payments will need their third payment amounts to figure and claim the 2021 recovery rebate credit.
Taxpayers should also keep end of year documents including:
• Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments
• Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit
• Form 1095-A, Health Insurance Marketplace Statement, to reconcile advance premium tax credits for Marketplace coverage
Confirm mailing and email addresses and report name changes
To make sure forms make it to the them on time, taxpayers should confirm now that each employer, bank and other payer has their current mailing address or email address. People can report address changes by completing Form 8822, Change of Address and sending it to the IRS. Taxpayers should also notify the postal service to forward their mail by going online at USPS.com or their local post office. They should also notify the Social Security Administration of a legal name change.
View account information online
Individuals who have not set up an Online Account yet should do so soon. People who have already set up an Online Account should make sure they can still log in successfully. Taxpayers can use Online Account to securely access the latest available information about their federal tax account.
Review proper tax withholding and make adjustments if needed
Taxpayers may want to consider adjusting their withholding if they owed taxes or received a large refund in 2021. Changing withholding can help avoid a tax bill or let individuals keep more money each payday. Life changes – getting married or divorced, welcoming a child or taking on a second job – may also be reasons to change withholding. Taxpayers might think about completing a new Form W-4, Employee's Withholding Certificate, each year and when personal or financial situations change.
People also need to consider estimated tax payments. Individuals who receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income should make quarterly estimated tax payments. The last payment for 2021 is due on Jan. 18, 2022.
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10/28/2021

There are so many tax changes again this year. If you have any tax questions please give me a call and see what we can do.
503-252-4105

06/23/2021

Important changes to the Child Tax Credit will help many families get advance payments of the Child Tax Credit starting in the summer of 2021.
Half the total credit amount will be paid in ADVANCE monthly payments and you will claim the other half when you file your 2021 income tax return. They will issue the first advance payment on July 15, 2021. If you get paid too much, you might have to pay it back when you file your 2020 tax return. If you are married BOTH have to opt out. Here is the link to opt out of it.
https://www.irs.gov/credit.../child-tax-credit-update-portal
Child Tax Credit Update Portal | Internal Revenue Service
irs.gov
Child Tax Credit Update Portal | Internal Revenue Service
View your eligibility and unenroll from advance payments of the Child Tax Credit.

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04/29/2021

The end of tax season is almost here. Make appt now of lose out. Everything is up to date for taxes now. Have questions please feel free to call.

03/31/2021

For those taxpayers who already have filed and figured their tax based on the full amount of unemployment compensation, the IRS will determine the correct taxable amount of unemployment compensation and tax. Any resulting overpayment of tax will be either refunded or applied to other outstanding taxes owed.

For those who have already filed, the IRS will do these recalculations in two phases, starting with those taxpayers eligible for the up to $10,200 exclusion. The IRS will then adjust returns for those married filing jointly taxpayers who are eligible for the up to $20,400 exclusion and others with more complex returns.

There is no need for taxpayers to file an amended return unless the calculations make the taxpayer newly eligible for additional federal credits and deductions not already included on the original tax return.

For example, the IRS can adjust returns for those taxpayers who claimed the Earned Income Tax Credit (EITC) and, because the exclusion changed the income level, may now be eligible for an increase in the EITC amount which may result in a larger refund. However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but now are eligible because the exclusion changed their income.

These taxpayers may want to review their state tax returns as well.

03/13/2021

Caution. Your state may issue separate Forms 1099-G for unemployment compensation received from the state and the additional $600 a week federal unemployment compensation related to coronavirus relief. Include all unemployment compensation received on line 7.

If you received an overpayment of unemployment compensation in 2020 and you repaid any of it in 2020, subtract the amount you repaid from the total amount you received. Enter the result on line 7. Also enter “Repaid” and the amount you repaid on the dotted line next to line 7. If, in 2020, you repaid more than $3,000 of unemployment compensation that you included in gross income in an earlier year, see Repayments in Pub. 525 for details on how to report the payment.

03/13/2021

If your modified adjusted income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021 excludes from income up to $10,200 of unemployment compensation paid to you in 2020. For married taxpayers, you and your spouse can each exclude up to $10,200 of unemployment compensation. For example, if you were paid $20,000 of unemployment compensation and your spouse was paid $5,000, report $25,000 on line 7 and report $15,200 on line 8 as a negative amount (in parentheses). The $15,200 excluded from income is $10,200 for you and all of the $5,000 paid to your spouse. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. Use the Unemployment Compensation Exclusion Worksheet to figure your modified AGI and the amount you can exclude.

If you made contributions to a governmental unemployment compensation program or to a governmental paid family leave program and you aren't itemizing deductions, reduce the amount you report on line 7 by those contributions. If you are itemizing deductions, see the instructions on Form 1099-G.

03/10/2021

When will I receive the money under the child tax credit?
That's not clear. The goal is to divide the payments into monthly installments, but the Treasury Department may determine that's not possible. It could be quarterly or whatever method is as frequent as possible. But the earliest it's expected to start is in July.

Elaine Maag, a principal research associate in the Urban-Brookings Tax Policy Center, said monthly payments could begin as soon as July but if the government opts for quarterly payments it could take until the fall.

Taxpayers will be able to opt-out of the monthly payments and get a lump sum at tax time like they do now.

03/10/2021

NEW LAWS:Tax credits for families and workers
The legislation beefs up tax credits for families and certain low-income workers for 2021.
In an effort to combat poverty, lawmakers are expanding the child tax credit to $3,600 for each child under 6 and $3,000 for each child under age 18. Currently, families can receive a credit of up to $2,000 per child under age 17.
The enhanced portion of the credit will be available for single parents with annual incomes up to $75,000 and joint filers making up to $150,000.
The credit will also become fully refundable so more low-income parents can take advantage of it. Plus, families can receive payments monthly, rather than a lump sum once a year, which is aimed at making it easier for them to pay the bills.

03/09/2021

The unemployment of $10,000 is one step closer to not being taxable to federal. What is the state of Oregon going to do? I am on top of that one also.

02/07/2021

Proposed legislation introduced this week would remove taxes on up to $10,200 in unemployment aid for the 2020 tax filing year. The bill, the Coronavirus Unemployment Benefits Tax Relief Act, introduced by Senator Dick Durbin (D-Illinois) and Representative Cindy Axne (D-Iowa) is intended to stave off a nasty tax surprise for millions who lost their jobs and received unemployment benefits last year.

The proposed bill would waive federal income taxes on the first $10,200 of unemployment benefits that Americans received in 2020. Notably, it would apply not only to those who received traditional unemployment benefits through their state unemployment insurance program, but also to those who received benefits through federal unemployment programs such as Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC). “Across the country, tens of millions claimed these [unemployment] benefits at some point over the past year,” Rep. Axne said in a press release. “We expanded these benefits through the CARES Act and other legislation because we knew an adequate and stable source of income would be vital for workers trying to make ends meet. I’m proud to introduce this legislation with Senator Durbin to ensure that these workers don’t face an unexpected tax bill, which could put them into further economic peril this April.”