January 8, 2021 | TaxConnections

08 Jan 2021

Why Millions Of Taxpayers Have Not Received 2nd Stimulus Check

California Assembly Bill AB-5 On Worker Status: Employees V Independent Contractors

Millions of taxpayers have not received their 2nd stimulus check who used online services. Their 2nd stimulus check may have been sent to the wrong bank account. The IRS apparently sent payments to more than thirteen million bank accounts that have been closed and are no longer valid.

The bank accounts were set up by tax companies like Turbo Tax, HR Block and Jackson Hewitt as temporary accounts used to deposit tax refunds for taxpayers who opted to have tax preparation fees taken out of their tax refunds. Furthermore, for taxpayers who used online tax services it may be too late to receive their $600 stimulus payment. The banks involved are required to send the payments received back to the IRS. Taxpayers who do not receive their 2nd round stimulus checks by the January 15, 2021 deadline will have to wait to receive their stimulus check as a tax credit when they file their 2020 tax return.

Go to the IRS Get My Payment link to see the status of your corona virus stimulus check.

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Written by TaxConnections Admin | Posted in Economic Impact Payments • Find A Tax Professional • Stimulus Checks From IRS

08 Jan 2021

State And Local Voluntary Disclosure

This article is the second of a three-part series regarding the State and Local Tax consequences of doing business in multiple states. This article will discuss Voluntary Disclosure, Part 1 discussed Nexus and Part 3 will discuss the Audit Process.

The Wayfair decision changed the landscape for nexus in the sales and use tax area. It lowered the bar to establish nexus with a state, which gives a state the right to require the collection and remittance of sales and use taxes. The Supreme Court’s decision changed the nexus focus from the existence of a physical presence to an economic presence—which generally may be based on sales into the state themselves. As a result, many taxpayers may have triggered the nexus threshold, especially if a state imposes a factor presence standard for income, franchise or gross receipts taxes.

Written by George Rendziperis, J.D. | Posted in State And Local Tax • Voluntary Disclosure

08 Jan 2021

Important Tax Changes In 2021: Individuals And Businesses

Every year, it’s a sure bet that there will be changes to current tax law and this year is no different. From standard deductions to health savings accounts and tax rate schedules, here’s a checklist of tax changes to help you plan the year ahead.

Individuals

In 2021, a number of tax provisions are affected by inflation adjustments, including Health Savings Accounts, retirement contribution limits, and the foreign earned income exclusion. The tax rate structure, which ranges from 10 to 37 percent, remains similar to 2020; however, the tax-bracket thresholds increase for each filing status. Standard deductions also rise, and as a reminder, personal exemptions have been eliminated through tax year 2025.

Standard Deduction
In 2021, the standard deduction increases to $12,550 for individuals (up from $12,400 in 2020) and to $25,100 for married couples (up from $24,800 in 2020).

Written by TaxConnections Admin | Posted in 2021 Tax Changes • Business • Individual • Tax Planning And Trusts

08 Jan 2021

Treasury Issues Millions Of Second Economic Impact Payments By Debit Card

Starting this week, the Treasury Department and the Internal Revenue Service are sending approximately 8 million second Economic Impact Payments (EIPs) by prepaid debit card.

These EIP Cards follow the millions of payments already made by direct deposit and the ongoing mailing of paper checks that are delivering the second round of Economic Impact Payments as rapidly as possible.

For those who don’t receive a direct deposit, they should watch their mail for either a paper check or a prepaid debit card. To speed delivery of the payments to reach as many people as soon as possible the Treasury’s Bureau of Fiscal Service is sending payments out by prepaid debit card.

Written by IRS | Posted in Economic Impact Payments • IRS Notice • TaxConnections