You’ve heard the news regarding the third round of stimulus payments, but have you heard from your tax preparer? Don’t worry – we are okay! We are navigating the rough seas of the changes wrought by the new tax changes, but we see the dessert island on the horizon. (Yes, I mean dessert – it’s an island stocked with treats for after tax season). We are awaiting guidance from the IRS and State, as well as software updates as the IRS determines the nature and scope of reporting requirements (including updated forms, schema changes and business rules). There is also a possibility of the extension of the filing deadline. We will keep you updated as we know more.
Here’s the upshot from the government side of things: President Biden has signed the American Rescue Plan Act (HR1319).
A few highlights of the $1.9 Trillion Act include:
- An exclusion of up to $10,200 of unemployment benefits received for taxpayers making less than $150,000
- A third economic impact payment that is an advance of a 2021 tax credit
- Changes to the child tax credit, earned income credit and dependent care credit.
Preparation and filing of 2020 tax returns has definitely been impacted for us as tax preparers and you as taxpayers. We will be extending more returns than we ever have before due to these tax changes.
We will get through this together! And there’s ice cream at the finish line.