The Internal Revenue Service is in the process of reviewing the income tax returns of 10 million taxpayers who filed prior to the American Rescue Plan of 2021. That legislation made the first $10,800 of unemployment benefits non-taxable.
If you filed your return prior to the act, the review could result in a refund, a reduced amount due, or no change.
By definition, if the IRS changes an income tax return, they are required to first send a letter asking if you agree with the change. The letter gives you 30 days to respond. If you agree with the change, then no further action must be done, and any refund allowed will be tendered to the last known address.
If you disagree with the change, then a letter must be sent to the address on the notice explaining the reason for the disagreement. You should also include any evidence necessary to support the claim.
If you need any help, please let us know.
Let me leave you with this.
Today marks the end of tax season.
I remember my first. I worked twelve hour days handling the businesses during the day and appointments with families at night. The hours were brutal, but the worst part was not really knowing what I was doing. I hated having someone ask me a question so that I could make an excuse and go ask someone who would know.
The angst and anxiety of my early years is gone.
Rarely does someone now ask a question where I don’t know an answer, but now we have all sorts of new tax law to learn. Acronyms like PPP, EIDL, and ERC didn’t exist a couple of years ago, yet I have been writing about almost nothing else for the past fourteen months.
And it continues.
In the coming months, the new refundable credits created by the latest legislation will cause massive change. Then, the new administration will pass a new tax bill.
No one knows what it will look like, but I’m sure we can all agree that unless you’re broke, it won’t be good news. While they’re still passing out money, you better get into line because sooner or later they’ll ask for it back.
But let’s all celebrate a win while we can. Tax season has ended and summer is here.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there is anything you need, whether you are a current client or not, you have but to ask. I’m here and I remain,
Accounting Solutions Ltd.
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