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Where’s my tax refund? Track your payment and understand IRS delays

Posted on July 28th, 2021

Many tax refund payments in 2021 have been delayed for several months due to an IRS backlog of around 35 million unprocessed returns. This backlog was created because the IRS ran at restricted capacity in 2020 due to the pandemic. On top of this, the IRS is busy with stimulus payments, child tax credit payments, and refunds for 2020 unemployment compensation.

What’s the standard wait time for receiving a tax refund?

The IRS usually issues tax refunds within three weeks, but this year many taxpayers have waited several months. If your return has errors, or if you claimed the earned income tax credit or the child tax credit, or if you had to file a paper return instead of efiling, the wait may be even longer. If the IRS asks for more information about your return, you should respond with accurate information, as quickly as possible, to help speed things up.

Why is my refund delayed?

Beyond the internal IRS delays, here are the most common reasons your income tax refund might be delayed this year:

  • Your refund is suspected of identity theft or fraud.
  • You filed for the earned income tax credit or additional child tax credit.
  • Your return needs further review.

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Tax Return Identity Theft – How It Affects You

Posted on July 14th, 2021

Every year, countless fraudulent tax returns are filed so that fraudsters can collect a refund. Most people find out that their identity has been stolen for a fraudulent tax return, when they try to file a return, and are told by the IRS that a return has already been filed using their Social Security number.
If a fraudulent return has been filed in your name:
  • This does NOT affect any refund due to you; you are still entitled to receive your full refund.
  • This DOES affect your filing process. You will not be able to efile your US tax return for the year the fraudulent return was filed. Instead, you will have to complete an IRS Identity Theft Affidavit, and mail it to the IRS with a signed copy of your tax return. We can prepare these documents for you.
  • Your manually filed return will take longer to process, and so any refund will also take longer.
  • If you owe taxes, your tax payment is still due May 15; any delay in IRS processing because of the fraud does not extend the payment deadline.
  • For the next 3 years, in January, the IRS will mail you an identity theft PIN. This PIN will help the IRS verify that your upcoming returns really come from you. It will be required to efile your tax returns each year. Be sure you save this notice with your other tax documents, and bring it to us at tax time.

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Child Tax Credit Changes for 2021

Posted on July 8th, 2021

The Child Tax Credit was changed for 2021 by the American Rescue Plan Act, enacted in March. These changes apply only to the 2021 tax year. They include:

  • The total credit amount has increased for certain taxpayers.
  • The maximum age of a qualifying child is raised to 17, from 16 previously. This is based on the child’s age on December 31, 2021, not their age when you file your return.
  • The credit is fully refundable. This means you can receive the full amount even if it is more than what you owe in taxes.
  • Half of the total credit will be paid in advance monthly payments, based on your 2020 or 2019 tax return.  These payments will be made from July 15, 2021 through January 15, 2022. The other half is to be applied on your 2021 tax return, unless you opt out.

Accept the advance payments or opt out?

The monthly advance of the child tax credit is significant at the end of the year. The credit is normally part of your income tax return and would reduce your tax liability or increase your refund. The choice to have the child tax credit advanced will affect your refund or amount due when you file your return. (more…)


IRS Identity Protection PIN – Do You Need One?

Posted on June 11th, 2021

The IRS uses the Identity Protection Personal Identification Number (IP PIN) to verify a taxpayer’s identity and prevent fraudulent returns being filed in their name. In the past, the IRS assigned an IP PIN only to taxpayers who had a fraudulent return filed in their name or were victims of other forms of identity theft. The IP PIN program is now being offered to all taxpayers who can verify their identity, and whose Adjusted Gross Income is $72,000 or less.  

Why sign up for an IRS IP PIN?

The filing of fraudulent tax returns has increased significantly in 2021. To protect from fraud with the 2021 tax return, we are strongly encouraging all our clients to obtain an IP PIN.

 Being enrolled in the IP PIN program helps to protect you from future fraudulent tax filings, since only a person with the correct PIN will be able to file a tax return in your name. Although you are not responsible for a fraudulent return filed in your name, the fraud can still cause problems for you. The fraudulent return puts incorrect information into your IRS tax record. This can delay any refund, and it can also affect your applications for student loans, mortgages and other programs, until the IRS has time to correct the information from your real tax return. (more…)


Paycheck Protection Program 2021 – New Loans and Loan Forgiveness

Posted on January 19th, 2021

A new round of Paycheck Protection Program loans is now being offered. To qualify, your business must have a 25% reduction in gross sales for any quarter in 2020 compared to the same quarter in 2019. Businesses in the hospitality industry will qualify for loan amounts equivalent to 3.5 months of average payroll. All other businesses will qualify for 2.5 months average payroll.

Loan forgiveness requirements for these new loans are the same as for the first round of loans: at least 60% of the funds must be used for payroll, and your employee count may not decrease by more than 25%. 40% of the funds can be used for rent, mortgage interest and utilities, worker protection related to COVID-19, and certain other expenses.

The SBA began accepting applications for the new loans as of January 11. Some banks are also accepting applications now, while others have not started accepting them yet. Contact your lender for specific information. (more…)


Can You Itemize Deductions for 2020?

Posted on December 17th, 2020

As tax season approaches again, you may be wondering whether or not you should itemize deductions on your tax returns this year, or take the Standard Deduction.

Standard Deduction

The Standard Deduction was effectively doubled by changes in the 2017 Tax Cuts and Jobs Act (TCJA). The Standard Deduction for single taxpayers increased from $6,350 to $12,400; and for married filing jointly, it increased from $12,700 to $24,800.

The standard deduction makes your tax preparation much simpler, because you do not have to gather documents and add up potential deductions; you just have to claim that flat amount. It also makes your return less subject to an IRS challenge, because you aren’t giving the IRS anything to question.

Itemized Deductions

If you plan to itemize deductions, you will probably have to gather many more documents and organize more information so that you can support these deductions if the IRS challenges them. Many popular deductions are likely to be scrutinized closely by the IRS, including Charitable Donations. You may be more likely to have your returns examined if you claim these deductions. (more…)


Beware of Tax Debt Resolution Scams

Posted on November 13th, 2020

If you have a large tax debt, you may be targeted by a predatory “tax debt resolution” firm. These companies advertise heavily on TV and the internet, promising they can settle tax debts for “pennies on the dollar” through an Offer in Compromise (“OIC”). Their claims are nearly always exaggerated, and they may charge thousands of dollars up front for their services. This scam has become so common that the IRS now includes them in its  annual Dirty Dozen list of tax scams.

How predatory Tax Resolution companies operate:

Many predatory tax resolution companies will monitor public records for tax lien information, then target the affected taxpayers with misleading letters that warn of drastic consequences such as garnishment of wages or Social Security benefits, unless the taxpayer calls an 800 phone number right away. These letters are often designed to look like an official notice from the IRS or some other government agency. Once the taxpayer makes contact, the tax resolution company tries to pressure them into paying a high fee up front to complete an Offer In Compromise application on the taxpayer’s behalf, which the taxpayer may not qualify for, or which may not even apply to their situation. (more…)


Can You Take the Home Office Deduction?

Posted on November 4th, 2020

With more people working from home than ever before, you may be wondering if you can claim a home office deduction when you file your 2020 tax return next year. The short answer is that if you are an employee working remotely in your home office, you are NOT eligible to take the home office deduction.  (You are an employee if you receive a salary for your work, and get a W-2 form for your tax return.)

However, self-employed taxpayers who use their home for business may be able to deduct expenses for the business use of it whether they rent or own their home. If you are self-employed, here is what you need to keep in mind:

Regular and Exclusive Use. Generally, you must use a part of your home regularly and exclusively for business purposes. The part of a home used for business must also be:

  • A principal place of business, or
  • A place where you meet clients or customers in the normal course of business, or
  • A separate structure not attached to the home, such as a garage, barn, greenhouse, or studio.

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Pay Taxes on Your Unemployment Benefits

Posted on October 28th, 2020

If you have received unemployment compensation this year, or are still receiving it, you should know that unemployment compensation is taxable and must be reported on a 2020 federal income tax return. This includes all of the special unemployment compensation authorized under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), enacted this spring.

To avoid an unexpected tax bill next spring, you should have tax withheld starting as soon as possible on your benefits.  Withholding is voluntary; however, federal law allows any recipient to choose to have a flat 10% withheld from their benefits to cover part or all of their tax liability. To do that, fill out Form W-4V, Voluntary Withholding Request (PDF), and give it to the agency paying the benefits. Do not send it to the IRS. If the payor has its own withholding request form, use that form instead. This 10% is most likely not enough withholding for most taxpayers.

If you are no longer receiving benefits, and did not have any tax withheld on the benefits you received, there are still 2 ways you can catch up: (more…)


The Paycheck Protection Loan program is now accepting applications

Posted on April 2nd, 2020

The Paycheck Protection Loan and Forgiveness Program is an SBA loan intended to help small businesses keep employees on the payroll for up to 10 weeks during the coronavirus emergency, even if the business is not operating during this time.

Small businesses can now apply for this loan, starting April 1.

If you would like us to complete the application for you, or need help in filling it out yourself, please give us a call.

Who is Eligible?

All businesses with 500 or fewer employees* including non-profits, Veterans organizations, tribal concerns, sole proprietorships, self-employed individuals, and independent contractors.

*(In certain industries, some businesses may have more than 500 employees, if they meet SBA’s size standards for the industry. Read more about federal small business size standards here.)

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