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Vizhnay Accounting and Tax Services, 44-11 48 Avenue, Woodside, NY (2026)

06/28/2021

Three New IRS Tools for 2021 Child Tax Credit Advance Payments - Did You Know?

The IRS recently launched three new online tools (links below) to help eligible Americans claim and manage their advance payments of the 2021 Child Tax Credit (CTC). In addition to increasing the maximum CTC amount and raising the age limit for qualifying children, the American Rescue Plan authorized the IRS to send monthly advance payments of the 2021 credit to millions of eligible families beginning on July 15.

The Child Tax Credit Eligibility Assistant helps families find out whether they qualify for the 2021 CTC. You do not need to set up an IRS online account in order to use this tool. Just answer 2-5 questions about whether you claimed the CTC in 2019 or 2020, where you live, and, in some cases, your tax filing status, family size and income. If the tool determines that you may qualify for the credit, you can follow the MANAGE YOUR ADVANCE PAYMENTS link to make sure you are enrolled to get monthly payments by check or direct deposit beginning in July.

The Child Tax Credit Update Portal provides additional information on eligibility for the 2021 CTC. However, in order to use it, you must either have an IRS online account, or go through an identity verification process. Once you determine that you are eligible, you can use this tool to:

- Unenroll from the program (for example, if you qualified for the CTC in 2019 or 2020 but do not expect to qualify in 2021 due to a family status or income change)
- Opt out of receiving advance payments, and instead receive your 2021 credit as a lump sum when you file your tax return
- Update your mailing address, family size, banking information for direct deposit, etc.

Most eligible families do not need to take any action, and will automatically receive monthly advance payments of the 2021 CTC from July through December. However, if you qualify for the credit but did not file a 2019 or 2020 tax return, you may need to register for this program using the Non-Filers Signup Tool. If you qualified for the CTC in past years but did not claim it, a tax professional may be able to help you file an amended return and perhaps receive an IRS refund for the credit.

CTC Eligibility Assistant: https://www.irs.gov/credits-deductions/advance-child-tax-credit-eligibility-assistant

CTC Update Portal: https://www.irs.gov/credits-deductions/child-tax-credit-update-portal

Non-Filers Signup Tool: https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool

06/21/2021

Summer Jobs - Did You Know?

If you're starting a summer job or know a teen or student who is, here is a useful tax-saving tip:

Students and teenage employees normally have taxes withheld from their paychecks by their employer after filling out a Form W-4.

However, if the job is regarded as self-employment, like baby-sitting or lawn care can be, they should keep good records of all expenses to help maximize potential deductions.

In the case of lawn care, potential deductible expenses may include business cards, fliers, fuel, equipment rentals, chemicals, work mileage, etc. A tax professional can help advise on potential deductible expenses.

06/14/2021

IRS Notifying Families Who May Qualify for Advance CTC Payments – Did You Know?

The American Rescue Plan Act of 2021 made three key changes to the Child Tax Credit (CTC) for tax year 2021. First, it increased the age limit for qualifying children to 17. Second, it raised the maximum credit from $2,000 per child up to $3,600 per child under 6, and $3,000 per child of age 6 through 17. Finally, it authorized the U.S. Treasury to make monthly advance payments of the 2021 credit beginning this July.

CTC advance payments will be sent to millions of taxpayers by check or direct deposit on the 15th of July, September, October, November and December, as well as on August 13th. The maximum payment amount will be $300 per child under 6, and $250 per child of age 6–17.

The IRS recently mailed letters to over 36 million U.S. households to notify them of their potential eligibility for these monthly payments. In most cases, the IRS determined possible eligibility based on taxpayers' 2020 tax returns, or information they provided via the Non-Filers Tool for 2020 stimulus payments. In cases where a person has not yet filed a 2020 return or their return has not been processed, the IRS used their 2019 return instead.

Most eligible taxpayers do not need to take any action to begin receiving advance CTC payments. However, those who have not filed a 2019 or 2020 federal tax return should file as soon as possible to ensure that they get payments if they qualify. You can submit a 2020 return to qualify for CTC payments even if you owe no tax and usually do not have to file IRS returns.

In the coming weeks and months, the IRS will also add a number of online tools to help ensure that all eligible taxpayers receive their advance CTC payments. These will include an Update Portal to provide the IRS with information on changes to your income or family size, an opt-out tool and a tool to determine your eligibility for the credit.

06/10/2021

Quarterly Estimated Tax Payments - Reminder

If you are making quarterly estimated tax payments to the IRS, the due date for the April 1 - May 31 quarter of the year is June 15th, 2021.

For payments made using IRS Direct Pay, you can make payments until 8PM EST, and for payments using a credit or debit card, payments can be made up to midnight on the due date.

06/08/2021

2020 Tax Filing Deadline for U.S. Taxpayers Abroad Remains June 15, 2021

The IRS recently issued a reminder to American taxpayers living and working outside the U.S. that they must file their 2020 federal tax returns by Tuesday, June 15, 2021.

This June 15 deadline applies to U.S. citizens, dual citizens and resident aliens whose tax home and physical dwelling both lie outside the 50 states, D.C. and Puerto Rico. It also applies to active military personnel who were serving overseas on their normal filing due date. The IRS recommends attaching a note to your return explaining why you qualify for the special deadline.

Ordinarily, members of these groups may file their returns up to two months after the general IRS spring deadline. However, even though the IRS moved the 2020 tax filing deadline for U.S. residents from April 15 to May 17, 2021, the deadline for taxpayers outside the country did not change.

Many taxpayers abroad must file IRS returns even if they do not owe tax. For example, If you qualify for the Foreign Earned Income Exclusion or Foreign Tax Credit, which can reduce or eliminate your U.S. tax, you must file an IRS return to claim these benefits. You may have to file one or more forms disclosing your foreign bank accounts and other financial interests. A tax advisor can help you determine your filing requirements.

06/02/2021

Expanded Child Tax Credit for 2021 with Advance Payments – Did You Know?

The recently enacted American Rescue Plan Act (ARPA) made important changes to the Child Tax Credit (CTC) for 2021. The Act raises the maximum age for a child to qualify for the CTC from 16 to 17. The maximum credit amount will also increase from the 2019 and 2020 level of $2,000 per child. Qualifying taxpayers will receive a credit of up to $3,600 for each child age 5 or younger, and $3,000 per child age 6 through 17.

The increased CTC amount applies for eligible taxpayers with adjusted gross incomes (AGIs) in the following ranges:
Single: AGI of $75,000 or less
Married Filing Jointly: AGI of $150,000 or less
Head of Household: AGI of of $112,500 or less

Qualifying taxpayers with AGIs above these limits, but below $200,000 for individuals or $400,000 for joint filers, will still receive a credit of at least $2,000 per child. The 2021 CTC will completely phase out starting with AGIs above the $200,000 / $400,000 threshold. Married taxpayers who file separately typically only receive a partial CTC amount.

The CTC will also be fully refundable for 2021, meaning that if the credit reduces your tax to less than zero, you may receive an IRS refund. Furthermore, many people may receive up to 50% of their 2021 CTC in the form of advance payments. The IRS will start issuing these payments periodically beginning in July. The remaining credit amount will be calculated when you complete your 2021 federal tax return.

Unless Congress takes additional action, these special CTC provisions will apply ONLY for tax year 2021. The changes have no effect on your 2020 tax return. A tax professional can help you determine whether you qualify for the CTC, and how to claim the credit if you do.

05/26/2021

National 529 College Savings Day on Saturday - Did You Know?

If you put money in a 529 account for education, withdrawal of earnings are tax-free if used for qualified educational expenses. Qualified educational expenses include tuition, fees, housing, meals and books. Many states offer a full or partial tax deduction for 529 plan contributions. They may also offer incentives and promotions to encourage families to open and contribute to 529 accounts this coming Saturday for National 529 College Savings Day.

The 2017 Tax Cuts and Jobs Act (TCJA) also expanded eligibility for 529 savings plans. Up to $10,000 per year can be used for Kindergarten through Grade 12 education (public, private, or religious schools).

05/18/2021

IRS Begins Issuing Refunds for Eligible Unemployment Benefits Recipients

The American Rescue Plan Act (ARPA) retroactively excluded some 2020 unemployment benefits from taxable income. Generally, taxpayers with modified adjusted gross incomes below $150,000 do not have to pay tax on their first $10,200 of 2020 unemployment compensation. Unfortunately, many people who qualify for this exclusion filed their 2020 federal tax returns before the new law took effect in mid-March.

The IRS has now begun to review and adjust the returns of taxpayers who reported 2020 unemployment income. If the filer overpaid as a result of paying tax on excluded unemployment benefits, the IRS will either issue a special refund or reduce the balance of tax owed.

The IRS has begun to adjust the simplest returns affected by ARPA rules for 2020 unemployment benefits. Most of these returns belong to single filers without dependents who did not claim any refundable tax credits. After correcting all these returns and issuing appropriate refunds, IRS personnel will move on to adjust more complicated returns, such as joint returns filed by married couples.

Refunds will be sent by direct deposit to those who provided banking information on their 2020 returns, and by paper checks otherwise. The refunds will be subject to offset rules, which allow the IRS to withhold refunds to cover past-due taxes, unpaid child support or other debts. Any taxpayer whose return is adjusted will also receive an IRS notice explaining the changes made.

IRS officials have projected that this process will continue throughout the summer. In the meantime, most taxpayers who may have paid tax on excluded unemployment benefits do not have to take further action. Calling the IRS or filing an amended return will not result in a faster refund, and could even delay processing due to the need to reconcile multiple returns.

05/13/2021

IRS Online Account – Did You Know?

All taxpayers who can properly verify their identity may set up a personal IRS online account. To create an account, simply visit the IRS View Your Account Information webpage (link below). Maintaining an online account can help you prepare for your federal tax returns, view payment history, see select IRS notices and stay on track with your tax planning and budgeting throughout the year.

Setting up an online account will be particularly helpful if you are eligible to claim the Recovery Rebate Credit for 2020. The IRS offers this credit to those who qualified for Economic Impact Payments (EIPs, also called stimulus payments) in 2020, but received either no payments or smaller payments than they deserved. To apply for the credit, you need to know the amounts of any EIPs you received. Your IRS online account will display this information.

Other information available from your online account includes any balance you owe to the IRS, your payment history (including pending payments), and digital copies of IRS notices you have received. You can also get key information from your most recent tax return, which you may need in order to get your 2020 return filed or determine your eligibility for certain credits and other programs. For detailed information from your past tax returns, you can request a transcript.

To set up your account, you will need to go through an identity verification process. Once you have gathered the required documents, registration typically takes about 15 minutes.

IRS View Your Account Portal: https://www.irs.gov/payments/view-your-tax-account.

If your 2020 federal tax return is already filed, you may check on your refund status here: https://www.irs.gov/refunds.

05/11/2021

Protecting Against Tax Fraud - Did You Know?

The IRS will never:

- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer
- Demand that you pay the taxes without the opportunity to question or appeal the amount owed
- Threaten to bring in local police, immigration officers or other law enforcement officers

If an IRS agent shows up, they will always provide two forms of official credentials: a pocket commission and a government identification card.

The IRS may also assign certain cases to private debt collectors, but only after giving you written notice. Any payment to the private debt collectors should be made payable to the U.S Treasury.

05/05/2021

May 17 IRS Deadline – Pay and/or File Now to Avoid Penalties

The IRS has extended this year's deadline to May 17, 2021 for federal tax returns that were originally due on April 15. If you have not yet filed your 2020 tax return you should make every effort to do so by May 17.

If you cannot submit your 2020 return by the deadline, you can apply for an automatic filing extension to October 15, 2021. The standard way to request the extension is to file IRS Form 4868 by May 17. Bear in mind that this extension applies only to FILING your return; the payment due date will remain as May 17. Failing to pay the full amount you owe on or before May 17 may result in late fees, interest or other penalties.

If you anticipate owing tax, you should estimate the amount and include payment with your Form 4868. Alternatively, if you pay your tax with a debit or credit card or use the IRS Direct Pay or Electronic Federal Tax Payment System portal (see links below), you can get the extension to complete your return by October 15 without filing Form 4868. Simply indicate that your payment is for an automatic filing extension for tax year 2020.

If you cannot pay your tax right now due to pandemic-related hardships or other extenuating circumstances, the IRS offers installment payment options that may enable you to reduce or eliminate penalties. A tax professional can help you evaluate your options or get your return filed.

IRS Direct Pay portal: https://www.irs.gov/payments/direct-pay
Electronic Federal Tax Payment System (EFTPS) portal: https://www.irs.gov/payments/eftps-the-electronic-federal-tax-payment-system
Make IRS payments with a credit or debit card: https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card

05/03/2021

Claiming the Recovery Rebate Credit – Did You Know?

With the May 17 deadline to file 2020 federal tax returns rapidly approaching, many eligible Americans who don't file may risk losing out on a crucial tax credit. The Recovery Rebate Credit is offered to all taxpayers who file their 2020 returns and were underpaid when the IRS distributed 2020 Economic Impact Payments (EIPs, also called stimulus payments).

For a variety of reasons, some taxpayers may not have received the EIPs that they qualified for in 2020. Others received EIPs, but in smaller amounts than they deserved. Often, this problem occurred because the IRS had outdated information about the person's income or family size. For example, if a child was born or adopted into your family in 2020, the IRS likely did not have this information when calculating EIP amounts.

The first round of stimulus payments, called EIP1, included payments of up to $1,200 per individual and $500 per qualifying child. The IRS began sending these payments in spring 2020 and continued sending them throughout the year. The second round (EIP2) included payments of up to $600 per individual and $600 per qualifying child. Most recipients got their EIP2s in January 2021.

If the IRS underpaid you during either 2020 EIP round, the Recovery Rebate Credit enables you to receive the balance that you are owed as an IRS refund. However, you can only claim the credit by filing a 2020 tax return, even if you owe no tax and are not usually required to file.

A tax professional can help you prepare and file your return electronically so you receive your payment as quickly as possible. You will need to know the amounts of any EIPs you received, which you can get from IRS Notice 1444 (1444-A or 1444-B), or by setting up an online IRS account (link below).

Create an online IRS account: https://www.irs.gov/payments/view-your-tax-account.

Vizhnay Accounting and Tax Services

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