Ez1040 Tax Service

How will taxpayers receive their stimulus payment? Taxpayers with direct deposit information on file with the IRS will receive the payment that way. For those without direct deposit information on file with the IRS, the IRS will use federal records of recent payments to or from the government, where available, to make the payment as a direct deposit. This helps to expedite payment delivery. Otherwise, taxpayers will receive their payment as a check or debit card in the mail. ...Continue reading

More Economic Impact Payments set for disbursement in coming days; taxpayers should watch mail for paper checks, debit cards The Internal Revenue Service announced today that the next batch of Economic Impact Payments will be issued to taxpayers this week, with many of these coming by paper check or prepaid debit card. For taxpayers receiving direct deposit, this batch of payments began processing on Friday and will have an official pay date of Wednesday, March 24, with some ...Continue reading

Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days. This continues to be a tough time for many people, and the IRS wants to continue to do everything possib...Continue reading

Tips to help taxpayers spot and avoid tax scams Tax season is also busy season for savvy criminals. Scammers impersonating the IRS either over-the-phone, by email or in-person can steal money from people. All taxpayers should stay vigilant against these schemes. Here are some tips to help people recognize and avoid tax-related scams.... Email phishing scams The IRS does not initiate contact with taxpayers by email to request personal or financial information. Generally, the IRS first mails a paper bill to a person who owes taxes. In some special situations, the IRS will call or come to a home or business. Taxpayers should report IRS, Treasury or tax-related suspicious online or email phishing scams to [email protected]. They should not open any attachments, click on any links, reply to the sender, or take any other actions that could put them at risk. Phone scams The IRS generally first mails a bill to a taxpayer who owes taxes. There are specific ways to pay taxes. The agency and its authorized private collection agencies will not: Leave pre-recorded, urgent, or threatening messages on an answering system. Threaten to immediately bring in local police or other law enforcement groups to arrest the taxpayer for not paying, deport them or revoke their licenses. Call to demand immediate payment with a prepaid debit card, gift card or wire transfer. Ask for checks to third parties. Demand payment without giving the taxpayer an opportunity to question or appeal the amount owed. Criminals can fake or spoof caller ID numbers to appear to be anywhere in the country. Scammers can even spoof an IRS office phone number or the numbers of various local, state, federal or tribal government agencies. If a taxpayer receives an IRS or Treasury-related phone call, but doesn't owe taxes and has no reason to think they do, they should: Not give out any information. Hang up immediately. Contact the Treasury Inspector General for Tax Administration to report the IRS impersonation scam call. Report the caller ID and callback number to the IRS by sending it to [email protected]. The subject line should include "IRS Phone Scam." Report the call to the Federal Trade Commission

People should be on the lookout for identity theft involving unemployment benefits The IRS urges taxpayers whose identities may have been used by thieves to steal unemployment benefits to file a tax return claiming only the income they actually received. In 2020, millions of taxpayers were affected by the COVID-19 pandemic through job loss or reduced work hours. Some taxpayers applied for and received unemployment compensation from their state. By law, unemployment benefits ...are taxable. Scammers also took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made as a result of these fraudulent claims went to the identity thieves. Taxpayers who receive an incorrect Form 1099-G should contact the issuing state agency to request a revised form. If they’re unable to get a timely, corrected form from states, they should still file an accurate tax return, reporting only the income they received. They should save whatever documentation they have regarding their attempts to receive a corrected form from their state agency. What people should if they think they might be an identity theft victim People should visit Identity Theft Central for more information about the signs of identity theft. Taxpayers do not need to file a Form 14039, Identity Theft Affidavit, with the IRS about an incorrect Form 1099-G. An affidavit should only be filed only if the taxpayer’s e-filed return is rejected because a return using the same Social Security number already has been filed. If a taxpayer is concerned that their personal information has been stolen and they want to protect their identity when filing their federal tax return, they can request an identity protection PIN from the IRS. An Identity Protection PIN is a six-digit number that prevents someone else from filing a tax return using a taxpayer’s Social Security number. The IP PIN is known only to the taxpayer and the IRS, and this step helps the IRS verify the taxpayer’s identity when they file their electronic or paper tax return. States should not issue Forms 1099-Gs to taxpayers they know to be victims of identity theft involving unemployment compensation.

2021 tax filing season begins Feb. 12; IRS outlines steps to speed refunds during pandemic The Internal Revenue Service announced that the nation's tax season will start on Friday, Feb. 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns. The Feb. 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the Dec. 27 tax law changes that provided a second round of Eco...Continue reading

Every taxpayer has the right to challenge the IRS’s position and be heard Taxpayers have the right to challenge the IRS’s position and be heard. This is part of Taxpayer Bill of Rights, which clearly outlines the fundamental rights every taxpayer has when working with the IRS. Taxpayers have the right to:... Raise objections. Provide additional documentation in response to formal or proposed IRS actions. Expect the IRS to consider their objections timely. Have the IRS consider any supporting documentation promptly. Receive a response if the IRS does not agree with their position. Here are some specific things the right to challenge the IRS’s position and be heard affords taxpayers. In some cases, the IRS will notify a taxpayer that their tax return has a mathematical or clerical error. If this happens, the taxpayer: o Has 60 days to tell the IRS that they disagree. o Should provide copies of any records that may help correct the error. o May call the number listed on the letter or bill for assistance. o Can expect the agency to make the necessary adjustment to their account and send a correction if the IRS upholds the taxpayer’s position. Here’s what will happen if the IRS does not agree with the taxpayer’s position: o The agency will issue a notice proposing a tax adjustment. o This is a letter that comes in the mail. o This notice provides the taxpayer with a right to challenge the proposed adjustment. o The taxpayer makes this challenge by filing a petition in U.S. Tax Court. The taxpayer must generally file the petition within 90 days of the date of the notice, or 150 days if it is addressed outside the United States. Taxpayers can submit documentation and raise objections during an audit. If the IRS does not agree with the taxpayer’s position, the agency issues a notice explaining why it is increasing the tax. Prior to paying the tax, the taxpayer has the right to petition the U.S. Tax Court and challenge the agency’s decision. In some circumstances, the IRS must provide a taxpayer with an opportunity for a hearing before an independent Office of Appeals. The agency must do this: o Before taking enforcement action to collect a tax debt. These actions include levying the taxpayer’s bank account. o Immediately after filing a notice of federal tax lien in the appropriate state filing location. If the taxpayer disagrees with the decision of the Appeals Office, they can petition the U.S. Tax Court

Most taxpayers can deduct up to $300 in charitable contributions without itemizing deductions Following tax law changes, cash donations of up to $300 made this year by December 31, 2020 are now deductible without having to itemize when people file their taxes in 2021. The Coronavirus Aid, Relief and Economic Security Act includes several temporary tax law changes to help charities. This includes the special $300 deduction designed especially for people who choose to take the... standard deduction, rather than itemizing their deductions. This change allows individual taxpayers to claim a deduction of up to $300 for cash donations made to charity during 2020. This deduction lowers both adjusted gross income and taxable income translating into tax savings for those making donations to qualifying tax-exempt organizations. Before making a donation, taxpayers should check the Tax Exempt Organization Search tool on IRS.gov to make sure the organization is eligible for tax deductible donations. Cash donations include those made by check, credit card or debit card. They don't include securities, household items or other property. Though cash contributions to most charitable organizations qualify, some don’t. People should review Publication 526, Charitable Contributions for details. Cash contributions made to supporting organizations are not tax deductible.

IRS to employers: Remember Feb. 1, 2021 deadline for Form W-2, other wage statements The Internal Revenue Service today reminded employers that they must file Form W-2 and other wage statements by Feb. 1, 2021, to avoid penalties and help the IRS prevent fraud. A 2015 law made it a permanent requirement that employers file copies of their Form W-2, Wage and Tax Statements, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by Jan. 31.... That is also the date the Forms W-2 are due to workers. This upcoming tax season, however, Jan. 31 falls on a Sunday, pushing the due dates to the next business day, which is Monday, Feb. 1. Certain Forms 1099-MISC, Miscellaneous Income and Forms 1099-NEC, Nonemployee Compensation, are also normally due to taxpayers on Jan. 31, but this tax season they too will be due on the next business day, Feb. 1, 2021. Various other due dates related to Form 1099-MISC, including dates dues to the IRS, can be found in the instructions on IRS.gov. Helping fraud detection: The normal January filing date for wage statements means that the IRS can more easily detect refund fraud by verifying income that individuals report on their tax returns. Employers can help support that process, and avoid penalties, by filing the forms on time and without errors. The IRS recommends e-file as the quickest, most accurate and convenient way to file these forms. Start early: Good preparation now can help businesses avoid problems later. For instance, employers can get an early start verifying or updating employee information like names, addresses and Social Security numbers or Individual Taxpayer Identification Numbers. They should also ensure their company’s account information is current and active with the Social Security Administration before January. Businesses should also order paper Forms W-2 early if needed. Automatic extensions of time to file Forms W-2 are not available. The IRS will only grant extensions for very specific reasons. Details can be found on the instructions for Form 8809, Application for Time to File Information Returns.

Taxpayers should check out these tips before choosing a tax preparer As taxpayers get ready to file their 2021 taxes, they may be thinking about hiring a tax preparer. People should choose a tax preparer wisely. This is important because taxpayers are responsible for all the information on their return, no matter who prepares it for them. There are different kinds of tax preparers, and a taxpayer’s needs will help determine which kind of preparer is best for them. With that i...n mind, here are some quick tips to help people choose a preparer. When choosing a tax professional, taxpayers should: Check the IRS Directory of Preparers. While it is not a complete listing of tax preparers, it does include those who are enrolled agents, CPAs and attorneys, as well as those who participate in the Annual Filing Season Program. Check the preparer’s history with the Better Business Bureau. Taxpayers can verify an enrolled agent’s status on IRS.gov. Ask about fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of your refund into their financial accounts. Be wary of tax return preparers who claim they can get larger refunds than others. Ask if they plan to use e-file. Make sure the preparer is available. People should consider whether the individual or firm will be around for months or years after filing the return. Taxpayers should do this because they might need the preparer to answer questions about the preparation of the tax return. Ensure the preparer signs and includes their preparer tax identification number. Paid tax return preparers must have a PTIN to prepare tax returns. Check the person's credentials. Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in tax matters. Other tax return preparers who participate in the IRS Annual Filing Season Program have limited practice rights to represent taxpayers during audits of returns they prepared.

Taxpayer Relief Initiative aims to help those financially affected by COVID-19 The IRS reviewed its collection activities to see how it could provide relief for taxpayers who owe taxes but are struggling financially because of the pandemic. The agency is expanding taxpayer options for making payments and other ways to resolve tax debt. Taxpayers who owe taxes always had options to get help through payment plans and other tools from the IRS. The new IRS Taxpayer Relief Initia...tive is expanding on those tools. These revised COVID-related collection procedures will be helpful to taxpayers, especially those who have a record of filing their returns and paying their taxes on time. Here are the highlights of the Taxpayer Relief Initiative: Taxpayers who qualify for a short-term payment plan may now have up to 180 days to resolve their tax liabilities instead of 120 days. The IRS is offering flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise. The IRS will automatically add certain new tax balances to existing Installment Agreements, for individual and business taxpayers who have gone out of business. Certain qualified individual taxpayers who owe less than $250,000 may set up Installment Agreements without providing a financial statement if their monthly payment proposal is sufficient. Some individual taxpayers who only owe for the 2019 tax year and owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS. Qualified taxpayers with existing Direct Debit Installment Agreements may be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.

Here’s how visually impaired taxpayers can access IRS resources and information The IRS is here to serve and support all of America’s taxpayers including, those who use assistive technology. The agency’s Alternative Media Center provides resources and accessibility services to taxpayers with disabilities. Tax-related content is available in a variety of formats for use with assistive technology such as screen reading software, refreshable Braille displays and voice recognitio...n software. Hundreds of tax forms and publications can be viewed or downloaded in alternative formats including: Text-only Braille ready files Browser-friendly HTML Accessible PDF Large print PDF The AMC is working to make IRS resources and information as accessible as possible. However, not every product is available in every alternative format. How to get accessible tax products People who need an alternative tax product can download it from the Accessible Forms and Publications page on IRS.gov. They can also request Braille or large print copies by calling the IRS at 800-829-3676. How to request tax notices and letters in Braille or large print Any taxpayer receives an IRS notice or letter that they need in Braille or large print can do one of the following: Call the IRS at 800 829-1040. Fax their notice with a cover sheet to the AMC at 855-473-2006. The cover sheet should include their name, address, phone number and the preferred format of the document. Mail their notice or letter with a note stating their preferred format to: IRS Alternative Media Center 400 N. 8th St., Room G39 Richmond, VA 23219

How the CARES Act changes deducting charitable contributions Whether taxpayers are supporting natural disaster recovery, COVID-19 pandemic aid or another cause that’s personally meaningful to them, their charitable donations may be tax deductible. These deductions basically reduce the amount of their taxable income. Here’s how the CARES Act changes deducting charitable contributions made in 2020:... Previously, charitable contributions could only be deducted if taxpayers itemized their deductions. However, taxpayers who don’t itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying organizations. For the purposes of this deduction, qualifying organizations are those that are religious, charitable, educational, scientific or literary in purpose. The law changed in this area due to the Coronavirus Aid, Relief, and Economic Security Act. The CARES Act also suspends limits on charitable contributions and temporarily increases limits on contributions of food inventory. More information about these changes is available on IRS.gov