Deadline for requesting Economic Impact Payment extended to November 21 at 3 P.M ET

The stimulus payments of $1200 or $2400 has been issuing to all eligible Individual and Couples from April 2020 onwards and the addition of $500 is on each eligible Child.

Non-Filer tool will be useful for the Individuals who are not required to file their tax returns but eligible to get Stimulus Payments.

Businesses and Tax-Exempt Organisations may be eligible for Covid-19 Relief interms of Employer Tax Credits (Employee Retention Credit, Paid Leave for Workers – Funds to Small and Mid-size Businesses)

People will get an automatic extension of 6-months to file their tax returns but not for the paying due amount. Due amount must pay on or before actual Due Date (Apr 15th).

For extension applied people due date would be Oct 15th.

To get extension file Form 4868 either electronically or paper version. Or to get the extension pay all or part of your estimated income tax due and indicate that the payment is for an Extension purpose using Credit, Debit, Direct Pay etc.

Due to this Covid-19 many businesses have been severely impacted. This loss is unimaginable by suspending their regular functions fully or partially and are really facing problems to maintain their employees on companies’ payroll. To encourage both Employers and Employees IRS came up with new Credit regardless of size of organization (includes Tax Exempt Organizations).

New Covid-19 Employer Tax Credit (The Employee Retention Credit)

The Credit for Paid Sick and Family Leave

The refundable credit is 50% of up to $10,000 in qualified wages paid to an employee by an eligible employer

The wages paid from Mar 13, 2020 to Dec 31, 2020 are considered for their credit

Tax Exempt Individuals are also eligible

NOTE: Employer cannot use same wages for the Employee Retention Credit and The Credit for Paid Sick and Family Leave

This is a dream for all Tax Agencies, Tax Consultants for a number of years and finally make it possible by bringing the Electronic Amendment accessibility. Now File2Fed is going to treat Form 1040X as an electronically filed form can file using available software products.

Form 1040X can still file a Paper version, but do not have chance to track refund for amendment return.

Lower income households without a filing requirement

Individuals with income below $12,200

Married Couples with income below $24,400

Parttime workers

People who work in the Gig economy

Students who cannot be claimed as dependents on someone else’s return

Criminals and Fraudsters continue to make this Pandemic situation to their progress of growth. They steal personal information and money by offering fake at-home test kits, pills, vaccines and advice on unproven treatments for Covid-19. Social websites, emails and advertisements are the main sources for them to do fraudulent stuff.

Notice 1444 is an Economic Impact Payment notice provides information like

Amount of the Payment Received

How the Payment was made

How to report any payment that was not received

This notice will reach you through mail to the address provided in your Income Tax Return within 15-days once the payments has hit the bank.

Note: Especially people who does not get the payment as shown in the notice must keep it safe. When these people file Income Tax Return for TY2020 can claim additional credits if they eligible for them.

File2Fed experts says there is always 98% chance to get benefits for filing a tax return, hence never lose money you really deserve it. Below are the common situations to file a Tax Return, if anyone of below applies to you then you may be owed a Refund. Also, apart from this refund, refundable tax credits are there to grab. Hence to receive these you must have to file your Income Tax Return.

Earned Income Tax Credit: This is purely depending on the income you earned and number of children you have

Child Tax Credit: Every qualified child can have $2000 as the credit which is partially refundable up to $1400

Education Credits: To eligible for these credits you are going to pay high education cost for yourself, a Spouse or Dependent. Form 8863 is required to file along with Income Tax Return to get the education credits.

Of course, yes, it is taxable and should report in 2021 Income Tax Return File – maintain withholding and avoid tax due surprise. The Form will be issued to the recipients of unemployment benefits in Jan 2021 from agency who paying these benefits.

There is a Tax Relief for the people who are affected by natural disasters like Wild-Fire, Hurricanes, Straight Line winds etc.

CA Wildfire victims from – Counties of Butte

LA Hurricane Laura victims from – Parishes of Caddo, La Salle, St. Landry

OR Wildfire and Straight-Line Winds victims from – Counties of Clackamas, Douglas, Jackson, Klamath, Lane, Lincoln, Linn and Marion.

ITIN holders with middle digits “88” are notify to check their ITINs expired or not. Also middle digits 90,91,92,94,95,96,97,98 or 99 notified to check.

Middle digits 88 issued before 2013 expires at the end of the year 2020

Middle digits 90,91,92,94,95,96,97,98 or 99 were assigned before 2013 and have not already been renewed, will also expired at end of 2020

Middle digits 70,71,72,73,74,75,76,77,78,79,80,81,82,83,84,85,86, or 87 that expired in 2016, 2017, 2018, 0r 2019 can also renewed

Those who needs to fille their tax returns but not having SSN and are not eligible to get an SSN can apply for ITIN

The above said middle digit holders can hurry up in renewal of their ITINs to make sure not having delay in issuing Refunds.

File2Fed will guide how to Renewal (or) and Apply new ITINs.

Major Changes happened in Dec 2017 after taking TCJA (Tax Cuts and Jobs Act) into consideration. Both Individual and Businesses got affected by this Tax Reform Act.

Changes occurred in Tax Rates – (Decreases in rate)

Adjustments for Federal Income Tax withholding

Standard Deduction almost got doubled

Itemized things got altered like some of them suspended and limitations cancelled for some of them

Tax Credits got higher values

Moving Expenses claiming is only for Armed and Combat Forces

Limitations on employee business expenses

Limits of Contributions and Distributions of IRA, ABLE accounts have changed

RMD’s (Required Minimum Distribution) for Traditional IRA is mandatory for eligible people

For Businesses it is important to consider Business Structure and Accounting Methods when applying Tax Reform

QBI (Qualified Business Income) deduction is available for many Sole proprietors, Self-Employed individuals, Partners in Partnerships, Shareholders in Share S Corporation and Beneficial owners up to 20% QBI is allowed to deduct