Are you wondering if there’s a hard and fast rule about what income is taxable and what income is not taxable? The quick answer is that all income is taxable unless the law specifically excludes it. But as you might have guessed, there’s more to it than that.
What is IRS Letter 6419?
Taxpayers should have started receiving IRS Letter 6419, 2021 advance CTC, in January. The advance child tax credit payments letter helps taxpayers get the remainder of their 2021 tax credit. It includes the total amount of advance child tax credit payments taxpayers received in 2021 and the number of qualifying children used to calculate the advance payments.
What’s New for IRS Form 1040 This Year
If you’ve gathered your tax documents and are ready to tackle your tax return, there’s one more step you should take: becoming familiar with what’s new on the 2021 Form 1040. While the format of Form 1040 and its schedules remain similar to 2020, there are several changes. Many of these changes can be attributed to the American Rescue Plan Act of 2021 (ARP).
Non-Profits: Electronic Filing of Form 1024
Starting January 3, 2022, nonprofit organizations applying for recognition of exemption must submit Form 1024, Application for Recognition of Exemption Under Section 501(a) or Section 521 of the Internal Revenue Code, electronically online at Pay.gov. Form 1024, which was previously filed using a paper version, has been revised by the IRS to allow electronic filing. There is, however, a 90-day grace period during which the IRS will continue to accept paper versions of Form 1024 (Rev. 01-2018) and letter applications.
Important Information About Economic Impact Letters
The IRS began issuing Letter 6475, Your Third Economic Impact Payment, to EIP recipients in late January. This letter helps Economic Impact Payment recipients determine if they are entitled to and should claim the recovery rebate credit on their 2021 tax returns when they file in 2022. It contains information that can reduce errors and delays and help taxpayers or tax professionals prepare their 2021 federal tax returns.
Working Remotely Could Affect Your Taxes
When COVID-19 struck, many employers quickly switched to a work-from-home model for their employees. Many of them began working in a state other than where their office was located. While some workers have returned to their offices, as the pandemic drags on, more offices continue to work remotely with no back-to-office dates in sight.
Eight Facts About the Adoption Credit
Taxpayers who adopted or started the adoption process in 2021 may qualify for the adoption credit. This credit can be applied to international, domestic private, and public foster care adoption; however, taxpayers who adopt their spouse’s child cannot claim this credit.
NYS Tax: Election Period for Pass-Through Entity Tax (PTET) is Open
New York State Department of Taxation and Finance sent this bulletin on 01/11/2022 09:01 AM EST If you wish to participate in the optional PTET for 2022, the deadline to opt in is March 15, 2022. To opt in:Log in …
Your Canceled Debt Could Be Taxable
Generally, debt that is forgiven or canceled by a lender is considered taxable income by the IRS and must be included as income on your tax return. When that debt is forgiven, negotiated down (when you pay less than you owe), or canceled you will receive a Form 1099-C, Cancellation of Debt, from your financial institution or credit union. Form 1099-C shows the amount of canceled or forgiven debt that was reported to the IRS. Creditors who forgive $600 or more of debt are required to issue this form.
Why Using the Correct Filing Status Matters
As taxpayers get ready for the upcoming filing season, one needs to know their correct filing status. A taxpayer’s filing status defines the type of tax return form they should use when filing their taxes. Filing status can affect the amount of tax they owe, and it may even determine if they have to file a tax return at all.