Processing Delays at the IRS

It is taking the IRS longer to process mailed documents as well as the following:

• Rebate Recovery Credit- The delay is caused because of the amount of time it is taking the IRS to confirm whether the taxpayer claiming the Recovery Rebate Credit previously received the stimulus payment. If the IRS shows payment was sent out, they are required to issue a 'trace' to find out who received the stimulus check. It is important that you claim the correct amount. Any errors in the credit amount on your tax return will be corrected. Your refund may be delayed while the IRS makes any necessary corrections.
• Paper tax returns,
• Amended tax returns, and
• All tax return-related correspondence.

The IRS is processing all mail in the order they received it. Do not file a second tax return or call the IRS.

The Advance of the Child Tax Credit

Why am I receiving this payment?

Advance Child Tax Credit payments are early payments from the IRS of 50 percent of the estimated amount of the Child Tax Credit that you may properly claim on your 2021 tax return during the 2022 tax filing season. If the IRS has processed your 2020 tax return or 2019 tax return, these monthly payments will be made starting in July and through December 2021, based on the information contained in that return

How do I opt out?

If you prefer not to receive monthly advance Child Tax Credit payments because you would rather claim the full credit when you file your 2021 tax return, or you know you will not be eligible for the Child Tax Credit for your 2021 tax year, you can unenroll through the Child Tax Credit Update Portal (CTC UP)

Does my spouse have to opt out as well?

Yes, both spouses will have to go through the process to unenroll in order to opt-out of the advance.

Can I opt-out after receiving payments?

You can opt out at any time in 2021 to stop receiving your remaining monthly payments. To unenroll, the IRS said you must opt-out three days before the first Thursday of the month to not receive the next month's payment

Will this be taxable?

These payments will not be counted as taxable income.

Will I have to pay it back?

Maybe. If you qualify for the repayment protection (you are a single filer making under $40k; HOH making under $50k; MFJ making under $60k) you will be excused from repaying some or all of the excess amount. If you do not qualify for repayment protection, you will need to report the entire excess amount on your 2021 tax return as additional income tax. This additional income tax will reduce the amount of your tax refund or increase your total tax due for 2021

Should I opt out?

Here are some reasons why unenrolling from the 2021 advance child tax credit program may be a good idea:

• You'd rather have one large payment next year instead of six smaller payments spanning 2021 and This could be the case for families saving up for a big expense or those who've budgeted for that money to pay off outstanding debt.
• You know your household circumstances or tax situation will change (or has already changed) this year and don't want to deal with having to update your information in the portal. This could be the case for divorced parents who alternate custody of a child.
• You're concerned the IRS might send you an overpayment based on old tax information from 2020 or 2019, and you don't want to worry about paying that money back. That could be the case if your household income goes up or if a dependent ages out of an age bracket before the end of 2021.

How Do I Check My Refund Status?

We electronically file our returns, so there is no guessing game if the IRS has your tax documents. Click Where's My Refund or get the IRS2GoApp to check the status of your refund.

Refunds

What You Need to Know

Expecting a refund? Some refunds must be held until the first week of March 2021.

If you claimed the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC), your refund may be delayed. You can expect to get your refund as soon as the first week of March if:

• You E-filed your return
• You chose to get your refund by direct deposit
• The IRS found no issues with your return

Read more about refund timing for early EITC/ACTC filers.

What You Need to Do

• Be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations.
• You don’t need to wait until mid-February to file your tax return. While the IRS may hold the refund, it will begin taking the steps it normally does to process your tax return once the filing season starts.
• File a complete and accurate return and include all known refundable credits with your original return.
• Check Where’s My Refund on IRS.gov or the IRS mobile app, IRS2Go, for your personalized refund status.

How Do I Check My Amended Tax Return Status?

We can amend taxes going back three tax years. If you have submitted an amended tax return to the IRS, you can go to Where's My Amended Tax Return to check the status.

How Can I Get My Tax Transcripts From the IRS?

You can get various Form 1040-series transcript types online or by mail. Go to Get Transcripts

To register and use this service, you will need:

• your SSN, date of birth, filing status and mailing address from your latest tax return,
• access to your email account,
• your personal account number from a credit card, mortgage, home equity loan, home equity line of credit or car loan, and
• a mobile phone with your name on the account.

How Do I Set-Up a Payment Plan to Pay My Tax Bill with the IRS?

• To Apply with the IRS, please click here and follow their instructions.
• Tax Time can also help you apply for a payment plan with the IRS when we prepare your taxes. Just ask your tax preparer and we will walk you through the process.

Downloads

• 2022 Common Deductions 
• Contract Pilot Common Deductions (PDF)
• Law Enforcement and Firefighter Common Deductions- 1099 Income (PDF)
• Overnights Worksheet (Excel)

Changes for Child Tax Credit and the American Opportunity Education Credit

The PATH Act made the following changes for returns that claim the child tax credit or the American Opportunity credit beginning with Tax Year 2016 tax returns:

• IRS is requiring for the 2021 tax filing year to provide the 1098T (Tuition Statement), along with physical receipts of any supplies for school, books, computers or anything related to education.
• Individuals cannot file an amended return to claim the Child Tax Credit or the American Opportunity Education Credit for prior years that a qualifying child did not have an ITIN or SSN.
• The EIN of the educational institution will be required to be reported on Form 8863. If it is missing the IRS will reject the return.

Individual Tax Identification Number (ITIN)

What You Need to Know

Processing delays are likely for filers with expired Individual Tax Identification Numbers.

ITINs that have not been used on a tax return for tax years 2017, 2018 or 2019 expired on December 31, 2020.

ITINs with middle digits 88 (For example 9NN-88-NNNN) expired on December 31, 2020.  Also, those with middle digits 90, 91, 92, 94, 95, 96, 97, 98 or 99, that was assigned before 2013 and have not already been renewed, will also have expired.

What You Need to Do

• You can renew your ITIN now if it expired and you plan to use it on a U.S. tax return.
• No action is needed by expired ITIN holders who don’t need to file a tax return next year.
• There are new documentation requirements when applying for or renewing an ITIN for certain dependents.
• To avoid delays, ensure accurate W-7 and valid ID documents are submitted.
• Find more information at IRS.gov/ITIN.

You can find additional information here.

Responsibilities for Payroll Taxes for S-Corp Filers/W2 Employers

Congratulations! You are an employer paying income to yourself or others. There are a few things you will need to make sure you are set up to avoid getting letters from the IRS. This quick reference guide should assist you with the key forms you need to file and the dates these forms should be filed.

You can also download this information as a PDF document here.

Quarterly Reports

 941 – EMPLOYER’S QUARTERLY FEDERAL TAX REPORT

The 941 form is a summary report of all the payroll taxes paid for the quarter. It will include the Total Wages, Federal Withholdings, Social Security and Medicare taxes. Use the Employer Identification Number provided by the IRS to file wages. The 941 form should be filled out and mailed to the IRS every quarter, due on April 30th, July 31st, October 31st and January 31st of the preceding year. Before the beginning of each calendar year, determine which type of deposit schedule you must use. If you reported $50,000 or less in taxes during the lookback period, you’re a monthly schedule depositor. If you reported more than $50,000 of taxes during the lookback period, you’re a semiweekly schedule depositor.

Payments can be made in several ways:

1. Electronically through www.eftps.gov – Please note the setup takes approximately 2 weeks to establish an account.
2. Electronically through software such as Quickbooks or other database software supported by the IRS. Please note this process might take up to a week to establish an account.
3. Payment Voucher and mailed to the IRS.

Where to file with payment:
Internal Revenue Service
P.O. Box 37941
Hartford, CT 06176-7941

Without Payment:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0005

Texas Workforce Commission

An account needs to be established with the Texas Workforce Commission, even if the only employee is yourself. This report should be filed every quarter, due on April 30th, July 31st, October 31st and January 31st of the preceding year.

Establish a new TWC account:

1. Login to www.twc.tx.us website
2. Under the Business & Employers tab, select Register a New Unemployment Tax Account
3. Sign-up for USER ID (This process takes about 20 minutes)

Making Payments through TWC account:

1. Login to www.twc.tx.us website
2. Under the Business & Employers tax, Select File & Pay Unemployment Taxes
3. Login to File Reports, Pay Taxes & More
4. Input wages for the quarter

Annual Reports

940 – EMPLOYER’S ANNUAL FEDERAL UNEMPLOYMENT TAX RETURN (FUTA)

The 940 form is the Employer’s Annual Federal Unemployment Tax Return. This report is due on January 31st. It will include total payments to all employees, any exemptions (fringe benefits, group-term life insurance, retirement/pension, dependent care and others).

Payments can be made in several ways:

1. Payment Voucher and mailed to the IRS
2. Electronically through www.eftps.gov – Please note the setup takes approximately 2 weeks to establish an account.
3. Electronically through software such as Quickbooks or other database software supported by the IRS. Please note this process might take up to a week to establish an account.

Where to file with payment:
Internal Revenue Service
P.O. Box 37941
Hartford, CT 06176-7941

Without Payment:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0005

W2 Forms

If Federal, Social Security and Medicare wages have been withheld through the year, a W2 and W3 (Transmittal of Wage and Tax Statements is required to file with the IRS. W2’s and W3’s are due to the employee as well as the IRS by January 31st. Please refer

There are several ways to file:

1. Electronically through software purchased from Office Supply Store (Staples, Office Depot)
2. Electronically through software such as QuickBooks or other database software supported by the IRS.
3. Manually write W2 and mail in the red copy along with a W3.

Mail to:
Social Security Administration
Data Operations Center
Wilkes-Barre, PA 18769-0001

1099 and 1099-NEC Forms

If contract employees are being paid wages $600.00 or more, but not withholding Federal, Social Security and Medicare wages, should be paid by 1099. 1099 and 1096 (Annual Summary and Transmittal of U. S. Information Returns). These forms are due to the contractor as well as the IRS by February 1.

There are several ways to file:

1. Electronically through software purchased from Office Supply Store (Staples, Office Depot)
2. Electronically through software such as QuickBooks® or other database software supported by the IRS.
3. Manually write out 1099 for contract employees as well as 1096 which is the summary of all 1099’s paid to all employees.

Mail to:
Department of the Treasure
Internal Revenue Service Center
Austin, TX 73301