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| Issue Number: 2021-02Inside This Issue
1. Increased deduction limit for corporate cash contributions for disaster relief; recordkeeping relief – Must act before February 25 Corporations may qualify for the new 100 percent limit for disaster relief contributions and a temporary waiver of the recordkeeping requirement for corporations. Qualified contributions must be paid by the corporation during the period beginning on January 1, 2020 and ending on February 25, 2021. 2. Updated FAQs and new IRS form available for sick and family leave credits The IRS published updated FAQs about recent legislation that extended and amended tax relief to certain small- and mid-sized employers under the Families First Coronavirus Response Act (FFCRA). The IRS also announced a new Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals for eligible self-employed individuals to claim sick and family leave tax credits under FFCRA. 3. Unemployment guidance and reminders IRS offers guidance to taxpayers on identity theft involving unemployment benefits The IRS urges taxpayers who receive Forms 1099-G for unemployment benefits they did not actually get because of identity theft to contact their appropriate state agency for a revised Form 1099-G showing they did not receive these benefits. Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only the income they received. Reminder to report unemployment compensation when filing taxes Taxpayers who received unemployment compensation should receive a Form 1099-G, Certain Government Payments showing the amount of unemployment compensation paid to them during the year in Box 1, and any federal income tax withheld in Box 4. They need this form for reporting unemployment when filing taxes. Taxpayers who don’t receive the form by mail may need to visit the website of the unemployment agency who paid the benefits to get a copy of the Form 1099-G. Please share this useful information with employees. More information can be found by visiting IRS.gov/uc. 4. Important reminders before filing 2020 tax returns Following an unpredictable year with many changes and challenges, the IRS shares important reminders for taxpayers who are about to file their 2020 federal tax returns about:
Double-check for missing or incorrect Forms W-2, 1099 before filing taxes With some areas seeing mail delays, the IRS reminds taxpayers to double-check to make sure they have all of their tax documents, including Forms W-2 and 1099, before filing a tax return. The IRS also provides guidance on what to do if the documents are missing or incorrect to still file on time and as accurately as possible. 5. Critical tax credit provides significant refund boost to millions The Earned Income Tax Credit is the federal government's largest refundable federal income tax credit for low- to moderate-income workers. See the IRS EITC news release for information on how to check eligibility, to see a list of workers who may be at risk for overlooking this important credit, helpful IRS YouTube videos and more. New look-back rule Under the COVID-related Tax Relief Act of 2020, taxpayers can use their 2019 earned income to figure their 2020 EITC if their 2019 earned income was more than their 2020 earned income. To qualify for EITC, people must have earned income, so this option may help workers who earned less in 2020, or received unemployment income instead of their regular wages, get bigger tax credits and larger refunds in the coming year. Please share this useful information with employees. 6. Post-release changes to Schedule K-1, Form 1041 instructions See the latest information on Schedule K-1 (Form 1041) Instructions. This page offers links to information on post-release changes, revisions, clarifications and so on made to forms, instructions, or publications already available on IRS.gov. Such changes are often the result of new tax legislation, new IRS guidance, clarifications, corrections and other revisions. 7. Avoid tax schemes – Report abusive tax promotions; Beware of "ghost" preparers Abusive tax promotions The IRS would like your help to identify promoters of “too good to be true” abusive tax scams and tax preparers using illegal scams to avoid paying taxes. Small business owners should be careful not to let promoters of tax scams mislead them. Those who do take part in scams could face owing more taxes and substantial penalties and interest. Use the Report Suspected Abusive Tax Promotions or Preparers form to make a referral to the IRS. Learn more at IRS.gov/scams. "Ghost" preparers The IRS reminds taxpayers to avoid "ghost" tax return preparers whose refusal to sign returns can cause a frightening array of problems. It is important to file a valid, accurate tax return because the taxpayer is ultimately responsible for it. Learn more in the news release about:
8. IRS creates new Chief Taxpayer Experience Officer position; Ken Corbin to lead new focus to improve service to taxpayers As part of a larger effort related to the Taxpayer First Act, the IRS announces the creation of a new Chief Taxpayer Experience Officer position to help unify and expand efforts across the agency to serve taxpayers. 9. Inside the IRS with “A Closer Look” “A Closer Look” covers a variety of timely issues of interest to taxpayers and the tax community. It also provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals. People can check here for prior posts and new updates. | ||
